Market Newsdesk

August 25, 2021 4:18 pm

Lannett Announces Fiscal 2021 Fourth-Quarter, Full-Year Financial Results

– Q4 Business and Financial Highlights:

— Net Sales Were $106 Million

— Cash Increased to Over $93 Million at June 30

— ANDA for Generic ADVAIR DISKUS® Submitted, Accepted for Priority Review

— Completed Re-financing Transaction, Debt Maturity Extended to 2026

– Post Quarter End:

— Added Generic Spiriva® Handihaler® to Pipeline, Third Drug/Device Respiratory Asset, Fifth Large, Durable Product Opportunity

PR Newswire

PHILADELPHIA, Aug. 25, 2021 /PRNewswire/ — Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2021 fourth quarter and full year ended June 30, 2021.

“With the recently signed agreement to be the exclusive U.S. distributor of a generic Spiriva^® Handihaler^®, we now have disclosed at least five large, durable assets in our pipeline,” said Tim Crew, chief executive officer of Lannett. “Each of these products has the potential to both be a significant contributor to our financial performance and to do so for an extended period of time. Combined, these products have the potential to transform our company. Currently, we believe all five products could be approved, or tentatively approved, by 2025, with the product closest to commercialization, generic ADVAIR DISKUS^®, potentially launching next calendar year, followed by generic Flovent Diskus^® in 2023, biosimilar Insulin Glargine in 2024 and biosimilar Insulin Aspart in 2025.

“Regarding our financial performance, throughout the fiscal 2021 full year several of our key products faced a highly competitive pricing environment. Despite these pressures, net sales of $479 million were just below our expectations of approximately $480 million, while adjusted gross margin of 26% was at the top end of our expectations. Importantly, our cash position increased to over $93 million at June 30, 2021, up from approximately $81 million at March 31, 2021.

“As earlier noted, in April, we successfully completed a refinancing transaction, which extended the maturity of our debt to 2026, upsized our credit facility and significantly freed up cash flow during the term of the debt, primarily through the elimination of mandatory debt payments until maturity. We thus have more financial flexibility to progress our portfolio and more resources to further invest in our growth initiatives.

“For the upcoming year our goals include: successfully commercializing recently and soon-to-be approved drug product candidates; advancing the development of our large, durable assets; further expanding our existing strategic relationships and forming new ones to add complementary products to our portfolio; and all the while, maintaining prudent expense discipline.”

For the fiscal 2021 fourth quarter on a GAAP basis, net sales were $106.0 million compared with $137.9 million for the fourth quarter of fiscal 2020. Gross profit was $22.7 million, or 21% of net sales, compared with $39.6 million, or 29% of net sales. Income tax expense was $129.2 million, primarily attributable to the impact of the full valuation allowance recorded against the Company’s deferred tax assets, compared to income tax benefit of $10.1 million for the prior year fourth quarter. Net loss was $177.9 million, or $4.50 per share, compared with $9.7 million, or $0.25 per share, for the fourth quarter of fiscal 2020.

For the fiscal 2021 fourth quarter reported on a Non-GAAP basis, net sales were $106.0 million compared with $137.9 million for the fourth quarter of fiscal 2020. Adjusted gross profit was $26.4 million, or 25% of net sales, compared with $48.9 million, or 35% of net sales. Adjusted operating income was $4.9 million compared with $26.7 million. Adjusted interest expense increased to $12.1 million from $11.3 million for the fourth quarter of fiscal 2020. Adjusted net loss was $7.4 million, or $0.19 per share, versus adjusted net income of $13.4 million, or $0.31 per diluted share, for the fiscal 2020 fourth quarter. Adjusted EBITDA for the fiscal 2021 fourth quarter was $12.1 million.

For the fiscal 2021 full year, on a GAAP basis, net sales were $478.8 million compared with $545.7 million for the fiscal 2020 full year. Gross profit was $75.6 million, or 16% of total net sales, compared with $165.2 million, or 30% of total net sales. During fiscal 2021, the company recorded non-cash asset impairment charges of $216.6 million, primarily related to the write down of intangible assets associated with the acquisition of Kremers Urban Pharmaceuticals product rights and the write-down of the value of a product license agreement. Income tax expense was $60.6 million, primarily attributable to the impact of the full valuation allowance recorded against the Company’s deferred tax assets, compared to income tax benefit of $15.3 million for the prior year. Net loss was $363.5 million, or $9.23 per share, compared with $33.4 million, or $0.86 per share, for fiscal 2020.

For the fiscal 2021 full year reported on a Non-GAAP basis, net sales were $478.8 million compared with $545.7 million for the fiscal 2020 full year. Adjusted gross profit was $122.3 million, or 26% of adjusted net sales, compared with $204.0 million, or 37% of adjusted net sales, for the prior year. Adjusted operating income was $43.4 million compared with $107.4 million. Adjusted interest expense declined to $43.7 million from $52.5 million for fiscal 2020. Adjusted net loss was $1.0 million, or $0.03 per share, versus adjusted net income of $45.6 million, or $1.07 per diluted share, for the fiscal 2020 full year.

Guidance for Fiscal 2022

Based on its current outlook, the company provided guidance for fiscal year 2022 as follows:

	GAAP	Adjusted*
Net sales	$400 million to $440 million	$400 million to $440 million
Gross margin %	Approximately 19 to 21%	Approximately 23% to 25%
R&D expense	$26 million to $29 million	$26 million to $29 million
SG&A expense	$64 million to $68 million	$58 million to $61 million
Interest and other	Approximately $58 million	Approximately $52 million
Effective tax rate	Approximately 0% to 5%	Approximately 21% to 22%
Adjusted EBITDA	N/A	$40 million to $55 million
Capital expenditures	$12 million to $18 million	$12 million to $18 million

*A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the attached financial tables.

Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for its fiscal 2021 fourth quarter and full year ended June 30, 2021. The conference call will be available to interested parties by dialing 888-771-4371 from the U.S. or Canada, or 847-585-4405 from international locations, passcode 50215666. The call will be broadcast via the Internet at www.lannett.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company’s financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

Use of Non-GAAP Financial Measures

This news release contains references to Non-GAAP financial measures, including Adjusted EBITDA, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance. The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. The Company also believes that including Adjusted EBITDA is appropriate to provide additional information to investors. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP.

Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included with this release.

Non-GAAP financial measures exclude, among others, the effects of (1) amortization of purchased intangibles and other purchase accounting entries, (2) restructuring expenses, (3) asset impairment charges, (4) non-cash interest expense, as well as (5) certain other items considered unusual or non-recurring in nature.

ADVAIR DISKUS^® and Flovent^® Diskus^® are registered trademarks of GlaxoSmithKline. Spiriva^® Handihaler^®are registered trademarks of Boehringer Ingelheim.

About Lannett Company, Inc.:

Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications – see financial schedule below for net sales by medical indication. For more information, visit the company’s website at www.lannett.com.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, successfully commercializing recently introduced products and launching and successfully commercializing additional products in fiscal 2022, the potential material impact of COVID-19 on future financial results, and achieving the financial metrics stated in the company’s guidance for fiscal 2022, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, including acquired products, and Lannett’s estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company’s Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company’s judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.

FINANCIAL SCHEDULES FOLLOW

LANNETT COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
	(Unaudited)
	June 30, 2021	June 30, 2020

ASSETS
Current assets:
Cash and cash equivalents	$ 93,286	$ 144,329
Accounts receivable, net	98,834	125,688
Inventories	109,545	142,867
Income taxes receivable	35,050	14,419
Assets held for sale	2,678	2,678
Other current assets	14,170	13,227
Total current assets	353,563	443,208
Property, plant and equipment, net	166,674	179,518
Intangible assets, net	137,835	374,735
Operating lease right-of-use asset	10,559	9,343
Deferred tax assets	–	117,890
Other assets	15,106	11,861
TOTAL ASSETS	$ 683,737	$ 1,136,555


LIABILITIES
Current liabilities:
Accounts payable	$ 29,585	$ 32,535
Accrued expenses	13,077	14,962
Accrued payroll and payroll-related expenses	10,680	16,304
Rebates payable	19,025	38,175
Royalties payable	13,779	20,863
Restructuring liability	8	27
Current operating lease liabilities	2,045	1,097
Short-term borrowings and current portion of long-term debt	–	88,189
Other current liabilities	2,270	2,713
Total current liabilities	90,469	214,865
Long-term debt, net	590,683	592,940
Long-term operating lease liabilities	11,047	9,844
Other liabilities	19,009	16,010
TOTAL LIABILITIES	711,208	833,659

STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock ($0.001 par value, 100,000,000 shares authorized; 40,913,148 and 39,963,127 shares issued; 39,576,606 and 38,798,787 shares outstanding at June 30, 2021 and June 30, 2020, respectively)	41	40
Additional paid-in capital	355,239	321,164
Accumulated deficit	(364,766)	(1,291)
Accumulated other comprehensive loss	(548)	(627)
Treasury stock (1,336,542 and 1,164,340 shares at June 30, 2021 and June 30, 2020, respectively)	(17,437)	(16,390)
Total stockholders’ equity (deficit)	(27,471)	302,896
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$ 683,737	$ 1,136,555

LANNETT COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)

	Three months ended		Twelve months ended
	June 30,		June 30,
	2021	2020	2021	2020

Net sales	$ 106,009	$ 137,920	$ 478,778	$ 545,744
Cost of sales	79,597	89,809	378,335	348,508
Amortization of intangibles	3,753	8,519	24,850	32,016
Gross profit	22,659	39,592	75,593	165,220
Operating expenses:
Research and development expenses	6,017	6,691	24,173	29,978
Selling, general and administrative expenses	21,576	18,591	68,078	79,467
Restructuring expenses	–	–	4,043	1,771
Asset impairment charges	18,550	18,841	216,550	34,448
Total operating expenses	46,143	44,123	312,844	145,664
Operating income (loss)	(23,484)	(4,531)	(237,251)	19,556
Other income (loss):
Loss on extinguishment of debt	(10,341)	–	(10,341)	(2,145)
Investment income	68	94	236	1,646
Interest expense	(13,217)	(14,682)	(53,830)	(66,845)
Other	(1,687)	(659)	(1,664)	(840)
Total other loss	(25,177)	(15,247)	(65,599)	(68,184)
Loss before income tax	(48,661)	(19,778)	(302,850)	(48,628)
Income tax expense (benefit)	129,225	(10,077)	60,625	(15,262)
Net loss	$ (177,886)	$ (9,701)	$ (363,475)	$ (33,366)

Loss per common share (1):
Basic	$ (4.50)	$ (0.25)	$ (9.23)	$ (0.86)
Diluted	$ (4.50)	$ (0.25)	$ (9.23)	$ (0.86)

Weighted average common shares outstanding (1):
Basic	39,544,909	38,752,080	39,391,589	38,592,618
Diluted	39,544,909	38,752,080	39,391,589	38,592,618

(1) Effective with the Warrants issued on April 22, 2021, the basic and diluted earnings per share was calculated based on the two-class method.

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Twelve months ended June 30, 2021

Net sales

Cost of sales

Amortization of
intangibles

Gross Profit

Gross
Margin
%

R&D
expenses

SG&A
expenses

Restructuring
expenses

Asset
impairment
charges

Operating
income
(loss)

Other loss

Loss before
income tax

Income tax
expense

Net loss

Diluted loss
per share
(n)

GAAP Reported

$ 478,778

$ 378,335

$ 24,850

$ 75,593

16%

$ 24,173

$ 68,078

$ 4,043

$ 216,550

$ (237,251)

$ (65,599)

$ (302,850)

$ 60,625

$ (363,475)

$ (9.23)

Adjustments:

Amortization of intangibles (a)

–

(24,850)

24,850

–

24,850

–

24,850

–

24,850

Cody API business (b)

–

(270)

–

270

(5)

(486)

–

761

–

761

–

761

Depreciation on capitalized software costs (c)

–

(4,204)

–

4,204

–

4,204

–

4,204

Branded prescription drug fee (d)

–

(831)

–

831

–

831

–

831

Restructuring expenses (e)

–

(4,043)

–

4,043

–

4,043

–

4,043

Asset impairment charges (f)

–

(216,550)

216,550

–

216,550

–

216,550

Write-downs for excess and obsolete inventory (g)

–

(16,623)

–

16,623

–

16,623

–

16,623

–

16,623

Distribution agreement renewal costs (h)

–

(4,966)

–

4,966

–

4,966

–

4,966

–

4,966

Loss on extinguishment of debt (i)

–

10,341

–

10,341

Debt refinancing costs (j)

–

(2,262)

–

2,262

–

2,262

–

2,262

Non-cash interest (k)

–

10,146

–

10,146

Other (l)

–

(5,610)

–

5,610

1,500

7,110

–

7,110

Tax adjustments (m)

–

(59,763)

59,763

Non-GAAP Adjusted

$ 478,778

$ 356,476

$ –

$ 122,302

26%

$ 24,168

$ 54,685

$ –

$ 43,449

$ (43,612)

$ (163)

$ 862

$ (1,025)

$ (0.03)

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude the federally mandated branded prescription drug fee related to Levothyroxine sold under the JSP agreement, which has not been sold since fiscal year ended June 30, 2019

(e)

To exclude expenses associated with the 2020 Restructuring Plan

(f)

To exclude asset impairment charges primarily related to the KUPI product rights intangible assets and the intangible asset for a distribution and supply agreement with Cediprof, Inc. for the Levothyroxine tablets product

(g)

To exclude write-downs for excess and obsolete inventory related to the discontinuance of certain product lines

(h)

To exclude the consideration recorded to renew the Company’s distribution agreement with Recro Gainesville LLC

(i)

To exclude the loss on extinguishment of debt related to the retirement of the Term Loan B in April 2021

(j)

To exclude legal and financial advisory costs related to the debt refinancing in April 2021

(k)

To exclude non-cash interest expense associated with debt issuance costs

(l)

To primarily exclude the reimbursement of legal costs associated with a distribution agreement and costs associated with a legal settlement

(m)

To exclude the impact of the full valuation allowance booked against the Company’s deferred tax assets as well as the tax effect of the pre-tax adjustments included above at applicable tax rates

(n)

The weighted average share number for the twelve months ended June 30, 2021 is 39,391,589 for GAAP and the non-GAAP loss per share calculations

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Twelve months ended June 30, 2020

Net sales

Cost of sales

Amortization of
intangibles

Gross Profit

Gross
Margin
%

R&D
expenses

SG&A
expenses

Restructuring
expenses

Asset
impairment
charges

Operating
income

Other loss

Income
(loss) before
income tax

Income tax
expense
(benefit)

Net income
(loss)

Diluted
earnings
(loss) per
share (l)

GAAP Reported

$ 545,744

$ 348,508

$ 32,016

$ 165,220

30%

$ 29,978

$ 79,467

$ 1,771

$ 34,448

$ 19,556

$ (68,184)

$ (48,628)

$ (15,262)

$ (33,366)

$ (0.86)

Adjustments:

Amortization of intangibles (a)

–

(32,016)

32,016

–

32,016

–

32,016

–

32,016

Cody API business (b)

–

(2,752)

–

2,752

(617)

(528)

–

3,897

–

3,897

–

3,897

Depreciation on capitalized software costs (c)

–

(4,233)

–

4,233

–

4,233

–

4,233

Decommissioning of Philadelphia sites (d)

–

(1,903)

–

1,903

–

1,903

–

1,903

–

1,903

Branded prescription drug fee (e)

–

(2,957)

–

2,957

–

2,957

–

2,957

Restructuring expenses (f)

–

(1,771)

–

1,771

–

1,771

–

1,771

Asset impairment charges (g)

–

(34,448)

34,448

–

34,448

–

34,448

Non-cash interest (h)

–

14,336

–

14,336

Loss on extinguishment of debt (i)

–

2,145

–

2,145

Other (j)

–

(2,094)

–

2,094

(94)

(4,395)

–

6,583

6,604

–

6,604

Tax adjustments (k)

–

25,378

(25,378)

Non-GAAP Adjusted

$ 545,744

$ 341,759

$ –

$ 203,985

37%

$ 29,267

$ 67,354

$ –

$ 107,364

$ (51,682)

$ 55,682

$ 10,116

$ 45,566

$ 1.07

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc.

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude the costs associated with the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites

(e)

To exclude the federally mandated branded prescription drug fee related to Levothyroxine sold under the JSP agreement, which has not been sold since fiscal year ended June 30, 2019

(f)

To exclude expenses associated with the Cody API Restructuring Plan

(g)

To exclude asset impairment charges primarily associated with an agreement to distribute Methylphenidate AB and related to the abandonment of several pipeline products within the KUPI IPR&D and Silarx IPR&D asset portfolios

(h)

To exclude non-cash interest expense associated with debt issuance costs

(i)

To exclude the loss on extinguishment of debt primarily related to the partial repayment of the outstanding Term Loan A balance

(j)

To primarily exclude accrued separation costs related to the Company’s former Chief Financial Officer and the Company’s cost reduction plan, as well as COVID-19 special recognition payments, legal settlements and costs previously incurred as part of the Company’s refinancing efforts, partially offset by gains on sales of assets previously held for sale

(k)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(l)

The weighted average share number for the twelve months ended June 30, 2020 is 38,592,618 for GAAP and 44,677,463 for the non-GAAP earnings (loss) per share calculations

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Three months ended June 30, 2021

Net sales

Cost of sales

Amortization
of intangibles

Gross Profit

Gross
Margin
%

R&D
expenses

SG&A
expenses

Asset
impairment
charges

Operating
income
(loss)

Other loss

Loss before
income tax

Income tax
expense

Net loss

Diluted loss
per share (k)

GAAP Reported

$ 106,009

$ 79,597

$ 3,753

$ 22,659

21%

$ 6,017

$ 21,576

$ 18,550

$ (23,484)

$ (25,177)

$ (48,661)

$ 129,225

$ (177,886)

$ (4.50)

Adjustments:

Amortization of intangibles (a)

–

(3,753)

3,753

–

3,753

–

3,753

–

3,753

Cody API business (b)

–

(21)

–

(13)

–

Depreciation on capitalized software costs (c)

–

(1,051)

–

1,051

–

1,051

–

1,051

Branded prescription drug fee (d)

–

(831)

–

831

–

831

–

831

Asset impairment charges (e)

–

(18,550)

18,550

–

18,550

–

18,550

Loss on extinguishment of debt (f)

–

10,341

–

10,341

Debt refinancing costs (g)

–

(2,262)

–

2,262

–

2,262

–

2,262

Non-cash interest (h)

–

1,073

–

1,073

Other (i)

–

(1,915)

–

1,915

1,500

3,415

–

3,415

Tax adjustments (j)

–

(129,139)

129,139

Non-GAAP Adjusted

$ 106,009

$ 79,576

$ –

$ 26,433

25%

$ 6,017

$ 15,504

$ –

$ 4,912

$ (12,263)

$ (7,351)

$ 86

$ (7,437)

$ (0.19)

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude the federally mandated branded prescription drug fee related to Levothyroxine sold under the JSP agreement, which has not been sold since fiscal year ended June 30, 2019

(e)

To exclude asset impairment charges primarily related to its intangible asset for a distribution and supply agreement with Cediprof, Inc. for the Levothyroxine tablets product

(f)

To exclude the loss on extinguishment of debt related to the retirement of the Term Loan B in April 2021

(g)

To exclude legal and financial advisory costs related to the debt refinancing in April 2021

(h)

To exclude non-cash interest expense associated with debt issuance costs

(i)

To primarily exclude the reimbursement of legal costs associated with a distribution agreement and costs associated with a legal settlement

(j)

To exclude the impact of the full valuation allowance booked against the Company’s deferred tax assets as well as the tax effect of the pre-tax adjustments included above at applicable tax rates

(k)

The weighted average share number for the three months ended June 30, 2021 is 39,544,909 for GAAP and non-GAAP loss per share calculations.

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Three months ended June 30, 2020

Net sales

Cost of sales

Amortization
of intangibles

Gross Profit

Gross
Margin
%

R&D
expenses

SG&A
expenses

Asset
impairment
charges

Operating
income
(loss)

Other loss

Income
(loss) before
income tax

Income tax
expense
(benefit)

Net income
(loss)

Diluted
earnings
(loss) per
share (i)

GAAP Reported

$ 137,920

$ 89,809

$ 8,519

$ 39,592

29%

$ 6,691

$ 18,591

$ 18,841

$ (4,531)

$ (15,247)

$ (19,778)

$ (10,077)

$ (9,701)

$ (0.25)

Adjustments:

Amortization of intangibles (a)

–

(8,519)

8,519

–

8,519

–

8,519

–

8,519

Cody API business (b)

–

158

–

(158)

(66)

(95)

–

Depreciation on capitalized software costs (c)

–

(1,058)

–

1,058

–

1,058

–

1,058

Decommissioning of Philadelphia sites (d)

–

(419)

–

419

–

419

–

419

–

419

Asset impairment charges (e)

–

(18,841)

18,841

–

18,841

–

18,841

Non-cash interest (f)

–

3,335

–

3,335

Other (g)

–

(508)

–

508

(64)

(1,817)

–

2,389

–

2,389

–

2,389

Tax adjustments (h)

–

11,436

(11,436)

Non-GAAP Adjusted

$ 137,920

$ 89,040

$ –

$ 48,880

35%

$ 6,561

$ 15,621

$ –

$ 26,698

$ (11,912)

$ 14,786

$ 1,359

$ 13,427

$ 0.31

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc.

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude the costs associated with the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites

(e)

To exclude asset impairment charges primarily related to the abandonment of several pipeline products within the KUPI IPR&D and Silarx IPR&D asset portfolios

(f)

To exclude non-cash interest expense associated with debt issuance costs

(g)

To exclude costs primarily related to separation costs related to the Company’s cost reduction plan, COVID-19 special recognition payments, as well as costs previously incurred as part of the Company’s refinancing efforts

(h)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(i)

The weighted average share number for the three months ended June 30, 2020 is 38,752,080 for GAAP and 46,111,366 for non-GAAP earnings (loss) per share calculations

LANNETT COMPANY, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
($ in thousands)

		Three months ended
		June 30, 2021

Net loss		$ (177,886)

Interest expense		13,217
Depreciation and amortization		9,479
Income tax expense		129,225
EBITDA		(25,965)

Share-based compensation		1,841
Inventory write-down		715
Asset impairment charges (a)		18,550
Investment income		(68)
Loss on extinguishment of debt (b)		10,341
Other non-operating loss		187
Debt refinancing costs (c)		2,262
Legal settlement (d)		1,500
Other (e)		2,781
Adjusted EBITDA (Non-GAAP)		$ 12,144

(a)

To exclude asset impairment charges primarily related to its intangible asset for a distribution and supply agreement with Cediprof, Inc. for the Levothyroxine tablets product

(b)

To exclude the loss on extinguishment of debt related to the retirement of the Term Loan B in April 2021

(c)

To exclude legal and financial advisory costs related to the debt refinancing in April 2021

(d)

To exclude costs associated with a legal settlement

(e)

To primarily exclude the reimbursement of legal costs associated with a distribution agreement as well as the federally mandated branded prescription drug fee related to Levothyroxine sold under the JSP agreement, which has not been sold since fiscal year ended June 30, 2019

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
($ in millions)

	Fiscal Year 2022 Guidance
				Non-GAAP
	GAAP	Adjustments		Adjusted

Net sales	$400 – $440	–		$400 – $440
Gross margin percentage	approx. 19% to 21%	4%	^(a)	approx. 23% to 25%
R&D expense	$26 – $29	–		$26 – $29
SG&A expense	$64 – $68	($6 – $7)	^(b)	$58 – $61
Interest and other	approx. $58	($6)	^(c)	approx. $52
Effective tax rate	approx. 0% to 5%	–		approx. 21% to 22%
Adjusted EBITDA	N/A	N/A		$40 – $55
Capital expenditures	$12 – $18	–		$12 – $18

(a) The adjustment primarily reflects amortization of purchased intangible assets related to the acquisition of Kremers Urban Pharmaceuticals, Inc. (“KUPI”)

(b) The adjustment primarily excludes depreciation on previously capitalized software integration costs associated with the KUPI acquisition and the reimbursement of legal costs associated with a distribution agreement

LANNETT COMPANY, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
($ in millions)

	Fiscal Year 2022 Guidance
	Low	High

Net loss	$ (72.0)	$ (60.0)

Interest expense	58.0	58.0
Depreciation and amortization	38.0	41.0
Income taxes	–	(3.0)
EBITDA	24.0	36.0

Share-based compensation	9.0	9.0
Inventory write-down	7.0	8.0
Other (a)	–	2.0
Adjusted EBITDA (Non-GAAP)	$ 40.0	$ 55.0

(a) Relates to the reimbursement of legal costs associated with a distribution agreement

LANNETT COMPANY, INC.
NET SALES BY MEDICAL INDICATION

	Three months ended		Twelve months ended
($ in thousands)	June 30,		June 30,
Medical Indication	2021	2020	2021	2020
Analgesic	$ 4,156	$ 1,874	$ 14,684	$ 8,680
Anti-Psychosis	5,697	26,346	43,720	104,934
Cardiovascular	13,364	21,251	65,987	88,576
Central Nervous System	23,467	20,102	95,115	77,256
Endocrinology	7,519	–	27,070	–
Gastrointestinal	15,048	17,457	67,540	73,477
Infectious Disease	12,175	21,515	67,761	73,237
Migraine	4,612	11,359	25,554	44,266
Respiratory/Allergy/Cough/Cold	3,017	2,829	9,258	11,576
Urinary	1,401	1,408	5,786	4,225
Other	10,651	7,166	35,312	35,013
Contract Manufacturing revenue	4,902	6,613	20,991	24,504
Net Sales	$ 106,009	$ 137,920	$ 478,778	$ 545,744

Contact:	Robert Jaffe
	Robert Jaffe Co., LLC
	(424) 288-4098

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SOURCE Lannett Company, Inc.

August 25, 2021 4:18 pm

Universal Logistics Holdings to Participate at Cowen’s 14th Annual Global Transportation & Sustainable Mobility Conference

PR Newswire

WARREN, Mich., Aug. 25, 2021 /PRNewswire/ — Universal Logistics Holdings, Inc. (NASDAQ: ULH), a leading asset-light provider of customized transportation and logistics solutions, today announced that Tim Phillips, Universal’s Chief Executive Officer, and Jude Beres, Chief Financial Officer, will participate in a fireside chat at Cowen’s 14th Annual Global Transportation & Sustainable Mobility Conference.

The event will begin at 8:00 AM ET on Friday, September 10, 2021, and will be broadcast live via webcast at http://www.universallogistics.com. To access the event, click on “Investor Relations” and follow the link to the webcast. A link to the replay will be available following the event.

About Universal

Universal Logistics Holdings, Inc. is a leading asset-light provider of customized transportation and logistics solutions throughout the United States, and in Mexico, Canada and Colombia. We provide our customers with supply chain solutions that can be scaled to meet their changing demands and volumes. We offer our customers a broad array of services across their entire supply chain, including truckload, brokerage, intermodal, dedicated, and value-added services.

View original content to download multimedia:https://www.prnewswire.com/news-releases/universal-logistics-holdings-to-participate-at-cowens-14th-annual-global-transportation–sustainable-mobility-conference-301362826.html

SOURCE Universal Logistics Holdings, Inc.

August 25, 2021 4:18 pm

Forward Lift Introduces New Frame-Engaging Mobile Column Lift Adapters

New adapter kits help increase productivity and decrease repair downtime

PR Newswire

DOWNERS GROVE, Ill., Aug. 25, 2021 /PRNewswire/ — Forward Lift, part of Vehicle Service Group (VSG) and Dover (NYSE: DOV), has introduced a new line of frame-engaging adapter kits for use on Forward’s mobile column lifts. The attachments allow technicians to more easily lift and service a wider range of forklifts, such as reach and pallet trucks, among others.

“Our customers depend on Forward’s mobile column lifts to service their fleets’ trucks, and this new adapter kit allows for their expanded use, adding more flexibility to an already versatile product,” said Doug Spiller, Director of Heavy-Duty Product Management, Forward Lift.

One of the most important aspects of forklift safety involves conducting regular and thorough inspections. The frame-engaging mobile column lift adapters allow for better access and visibility for inspections and repairs. Whether using it for inspections, seal or tire replacements, or steering, caster, and pin replacements or adjustments, the mobile column adapter assembly provides a safe way to gain under-vehicle access and keeps technicians off the floor.

“Forward Lift has been manufacturing quality lifts for more than 50 years, and we remain focused on continuing to produce equipment that helps our customers increase productivity, reduce unit downtime and maximize safety standards,” added Spiller.

The forklift adapter kits are designed to work in tandem with two Forward mobile column lifts, FCHW13 and FCHW18. The system requires no dedicated floor space and comes equipped with a red caster cart for easy storage. The adapter assembly, which weighs 880 pounds, quickly and easily engages and captures the forklift within itself for added stability. The kit also includes 1/2-inch and 3/4-inch leveling spacers.

To see the mobile column adapter assembly in action, watch the product demo video.

To learn more about Forward’s full line of products, visit ForwardLift.com, contact your local Forward distributor, or call 800-423-1722.

About Forward Lift:
Established in 1968, Forward Lift is a leading brand of automotive lifting equipment that is uniquely designed for a wide range of customers. Forward Lift provides safe and reliable lift systems for independent repair shops, body shops, national accounts, vehicle enthusiasts and heavy-duty truck maintenance facilities. Its products are sold by dedicated distributors and national parts suppliers.

Forward Lift is a Vehicle Service Group (VSG) brand and part of Dover’s Engineered Products segment. VSG comprises 13 major vehicle lift, wheel service, diagnostic and collision repair brands: Forward Lift, Rotary, Chief Collision Technology, Direct Lift, Warn Automotive, Ravaglioli, Hanmecson, Elektron, Blitz, Nogra, Butler, Space and Sirio. With its American headquarters in Madison, Indiana, VSG has operations worldwide, including ISO 9001-certified manufacturing centers in North America, Europe and Asia.

About Vehicle Service Group:
As an operating company of the Dover Corporation, Vehicle Service Group (VSG) offers the world’s premier brands in vehicle lifting, wheel service, collision repair and aftermarket OEM equipment. With over 90 years of experience, we design, test, manufacture, sell and support our products with one thing in mind, our customer.

About Dover:
Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 24,000 employees takes an ownership mindset, collaborating with customers to redefine what’s possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under “DOV.” Additional information is available at dovercorporation.com.

Vehicle Service Group Contact:

David Fischmer

(812) 265-9543
[email protected]

Dover Media Contact:
Adrian Sakowicz, VP, Communications    
(630) 743-5039    
[email protected]     

Dover Investor Contact:
Andrey Galiuk, VP, Corporate Development and Investor Relations   
(630) 743-5131   
[email protected]

View original content to download multimedia:https://www.prnewswire.com/news-releases/forward-lift-introduces-new-frame-engaging-mobile-column-lift-adapters-301362898.html

SOURCE Dover

August 25, 2021 4:18 pm

Guess?, Inc. Reports Fiscal Year 2022 Second Quarter Results

Guess?, Inc. Reports Fiscal Year 2022 Second Quarter Results

Q2 Fiscal 2022 Revenues Reached $629 Million, Up 58% Compared to Q2 Fiscal 2021, Down 8% Compared to Q2 Fiscal 2020

More than Doubled Operating Margin Versus the Pre-Pandemic Levels to Reach 13.9%

Q2 Earnings Per Share Increased by Over 2.5x Compared to Pre-Pandemic Levels to Finish at $0.91

Raising Full-Year Outlook for Operating Margin to 10.0%; Increasing Long-Term Operating Margin Goal to 12% and Adjusted Earnings Per Share to $3.50 by Fiscal 2024

Increases Share Repurchase Authorization to $200 Million

LOS ANGELES–(BUSINESS WIRE)–
Guess?, Inc. (NYSE: GES) today reported financial results for its second quarter ended July 31, 2021.

Carlos Alberini, Chief Executive Officer, commented, “We are very pleased with our performance this quarter, which significantly exceeded our earnings expectations. Compared to the second quarter of fiscal 2020, the LLY period, we expanded operating margin by over 700 basis points to 13.9%. Our revenues for the quarter finished down 8% versus LLY. The entire decline was due to a timing shift of European wholesale shipments into the third quarter and the impact of permanent store closures. We achieved this result in spite of the pandemic and being significantly less promotional in all of our direct-to-consumer businesses. Our operating profit growth was strong, up 90% to LLY. This resulted in earnings per share of $0.91, versus $0.35 in the LLY period.”

Paul Marciano, Co-Founder and Chief Creative Officer, added, “During the quarter we made great progress on our brand elevation strategy. This is a very ambitious project that touches almost every aspect of our business. The work that our teams have put into this has been extraordinary, and I want to thank them for their great contributions to this key initiative for our Company and our future.”

Mr. Alberini concluded, “Based on our progress, we now expect to deliver our 10% operating margin goal in the current year and are raising our expectations to reach 12% by fiscal year 2024, which would yield a return on invested capital of over 30% and adjusted earnings per share of around $3.50. The Guess brand has significant white space for revenue growth, and we are confident in our ability to reach our $2.8 billion revenue target by fiscal 2024. We continue to prioritize returning value to our shareholders and announced today that our Board has approved an increase of our existing share buyback program to $200 million. Overall, I could not be more excited about our future.”

Adjusted Amounts

This press release contains certain non-GAAP, or adjusted, financial measures. References to “adjusted” results exclude the impact of (i) asset impairment charges, (ii) net gains on lease modifications, (iii) certain professional service and legal fees and related (credits) costs, (iv) certain separation charges, (v) non-cash debt discount amortization on our convertible senior notes, (vi) the related income tax effects of the foregoing items, as well as the impact from changes in the income tax law on deferred income taxes in certain tax jurisdictions, net income tax settlements and adjustments to specific uncertain income tax positions, and (vii) certain discrete income tax adjustments, in each case where applicable. A reconciliation of reported GAAP results to comparable non-GAAP results is provided in the accompanying tables and discussed under the heading “Presentation of Non-GAAP Information” below.

Second Quarter Fiscal 2022 Results Compared to Second Quarter Fiscal 2020

For the second quarter of fiscal 2022, the Company recorded GAAP net earnings of $61.1 million, a 141.1% increase from $25.3 million for the second quarter of fiscal 2020. GAAP diluted EPS increased 160.0% to $0.91 for the second quarter of fiscal 2022, compared to $0.35 for the second quarter of fiscal 2020. The Company estimates a positive impact from its share buybacks of $0.11 and a minimal impact from currency on GAAP diluted EPS in the second quarter of fiscal 2022 when compared to the second quarter of fiscal 2020.

For the second quarter of fiscal 2022, the Company’s adjusted net earnings were $64.1 million, a 133.7% increase from $27.4 million for the second quarter of fiscal 2020. Adjusted diluted EPS increased 152.6% to $0.96, compared to $0.38 for the second quarter of fiscal 2020. The Company estimates its share buybacks had a positive impact of $0.13 and currency had a minimal impact on adjusted diluted EPS in the second quarter of fiscal 2022 when compared to the second quarter of fiscal 2020.

Net Revenue. Total net revenue for the second quarter of fiscal 2022 decreased 8.0% to $628.6 million, from $683.2 million in the second quarter of fiscal 2020. In constant currency, net revenue decreased by 10.8%.

Earnings from Operations. GAAP earnings from operations for the second quarter of fiscal 2022 increased 90.0% to $87.4 million (including $0.4 million net gains on lease modifications, $1.5 million in non-cash impairment charges taken on certain long-lived store related assets and a $0.3 million favorable currency translation impact), from $46.0 million (including $1.5 million in non-cash impairment charges taken on certain long-lived store related assets) in the second quarter of fiscal 2020. GAAP operating margin in the second quarter of fiscal 2022 increased 7.2% to 13.9%, from 6.7% in the second quarter of fiscal 2020, driven primarily by lower markdowns, lower occupancy costs and higher initial markups. The negative impact of currency on operating margin for the quarter was approximately 30 basis points.

For the second quarter of fiscal 2022, adjusted earnings from operations increased 84.9% to $88.6 million, from $47.9 million in the second quarter of fiscal 2020. Adjusted operating margin increased 7.1% to 14.1%, from 7.0% in the second quarter of fiscal 2020, driven primarily by lower markdowns, lower occupancy costs and higher initial markups.

Second Quarter Fiscal 2022 Results Compared to Second Quarter Fiscal 2021

For the second quarter of fiscal 2022, the Company recorded GAAP net earnings of $61.1 million, as compared to a GAAP net loss of $20.4 million for the second quarter of fiscal 2021. GAAP diluted EPS increased to $0.91 for the second quarter of fiscal 2022, compared to a GAAP diluted loss per share of $0.31 for the same prior-year quarter. The Company estimates a positive impact from its share buybacks and currency of $0.03 and $0.01, respectively, on GAAP diluted EPS in the second quarter of fiscal 2022 when compared to the prior-year quarter.

For the second quarter of fiscal 2022, the Company’s adjusted net earnings were $64.1 million, as compared to the Company’s adjusted net loss of $0.6 million for the second quarter of fiscal 2021. Adjusted diluted EPS increased to $0.96, compared to adjusted diluted loss per share of $0.01 for the same prior-year quarter. The Company estimates its share buybacks had a positive impact of $0.03 and currency had a minimal impact on adjusted diluted EPS in the second quarter of fiscal 2022 when compared to the prior-year quarter.

Net Revenue. Total net revenue for the second quarter of fiscal 2022 increased 57.7% to $628.6 million, from $398.5 million in the same prior-year quarter. In constant currency, net revenue increased by 51.1%.

Earnings (Loss) from Operations. GAAP earnings from operations for the second quarter of fiscal 2022 increased to $87.4 million (including $0.4 million net gains on lease modifications, $1.5 million in non-cash impairment charges taken on certain long-lived store related assets and a $2.3 million favorable currency translation impact), from a GAAP loss from operations of $14.3 million (including $0.9 million net gains on lease modifications and $12.0 million in non-cash impairment charges taken on certain long-lived store related assets) in the same prior-year quarter. GAAP operating margin in the second quarter of fiscal 2022 increased 17.5% to 13.9%, from negative 3.6% in the same prior-year quarter, driven primarily by overall leveraging of expenses. The positive impact of currency on operating margin for the quarter was approximately 30 basis points.

For the second quarter of fiscal 2022, adjusted earnings from operations increased to $88.6 million, from an adjusted operating loss of $0.9 million in the same prior-year quarter. Adjusted operating margin increased 14.3% to 14.1%, from negative 0.2% in the same prior-year quarter, driven primarily by overall leveraging of expenses.

Six-Month Period Fiscal 2022 Results Compared to Six-Month Period Fiscal 2020

For the six months ended July 31, 2021, the Company recorded GAAP net earnings of $73.1 million, compared to $3.9 million for the six months ended August 3, 2019. GAAP diluted EPS was $1.10 for the six months ended July 31, 2021, compared to $0.05 for the six months ended August 3, 2019. The Company estimates a net positive impact from its share buybacks and its prior year convertible notes transaction of $0.16 and a negative currency impact of $0.06 on GAAP diluted EPS for the six months ended July 31, 2021 when compared to the six months ended August 3, 2019.

For the six months ended July 31, 2021, the Company recorded adjusted net earnings of $78.0 million, compared to $7.8 million for the six months ended August 3, 2019. Adjusted diluted EPS was $1.17, compared to $0.10 for the six months ended August 3, 2019. The Company estimates its share buybacks and its prior year convertible notes transaction had a net positive impact of $0.20 and currency had a negative impact of $0.06 on adjusted diluted EPS during the six months ended July 31, 2021 when compared to the six months ended August 3, 2019.

Net Revenue. Total net revenue for the first six months of fiscal 2022 decreased 5.8% to $1.15 billion, from $1.22 billion for the six months ended August 3, 2019. In constant currency, net revenue decreased by 8.3%.

Earnings from Operations. GAAP earnings from operations for the first six months of fiscal 2022 was $114.0 million (including $2.6 million net gains on lease modifications, $1.9 million in non-cash impairment charges taken on certain long-lived store related assets and a $1.9 million unfavorable currency translation impact), compared to $21.5 million (including $3.3 million in non-cash impairment charges taken on certain long-lived store related assets) for the six months ended August 3, 2019. GAAP operating margin for the first six months of fiscal 2022 increased 8.1% to 9.9%, from 1.8% for the six months ended August 3, 2019, driven primarily by lower occupancy costs, higher initial markups and lower markdowns. The negative impact of currency on operating margin for the first six months of fiscal 2020 was approximately 50 basis points.

For the six months ended July 31, 2021, adjusted earnings from operations was $114.5 million, compared to $25.5 million for the six months ended August 3, 2019. Adjusted operating margin improved 7.9% to 10.0% for the six months ended July 31, 2021, from 2.1% for the six months ended August 3, 2019, driven primarily by lower occupancy costs, higher initial markups and lower markdowns.

Six-Month Period Fiscal 2022 Results Compared to Six-Month Period Fiscal 2021

For the six months ended July 31, 2021, the Company recorded GAAP net earnings of $73.1 million, compared to GAAP net loss of $178.0 million for the six months ended August 1, 2020. GAAP diluted EPS was $1.10 for the six months ended July 31, 2021, compared to GAAP diluted loss per share of $2.72 during the same prior-year period. The Company estimates a net positive impact from its share buybacks and its prior year convertible notes transaction and currency of $0.05 and $0.10, respectively, on GAAP diluted EPS for the six months ended July 31, 2021 when compared to the same prior-year period.

For the six months ended July 31, 2021, the Company recorded adjusted net earnings of $78.0 million, compared to an adjusted net loss of $119.6 million for the six months ended August 1, 2020. Adjusted diluted EPS was $1.17, compared to adjusted loss per share of $1.83 during the same prior-year period. The Company estimates its share buybacks and its prior year convertible notes transaction and currency had a net positive impact of $0.05 and $0.09, respectively, on adjusted diluted EPS during the six months ended July 31, 2021 when compared to the same prior-year period.

Net Revenue. Total net revenue for the first six months of fiscal 2022 increased 74.4% to $1.15 billion, from $658.8 million in the same prior-year period. In constant currency, net revenue increased by 66.6%.

Earnings (Loss) from Operations. GAAP earnings from operations for the first six months of fiscal 2022 was $114.0 million (including $2.6 million net gains on lease modifications, $1.9 million in non-cash impairment charges taken on certain long-lived store related assets and a $1.6 million favorable currency translation impact), compared to GAAP loss from operations of $176.8 million (including $0.4 million net gains on lease modifications and $64.9 million in non-cash impairment charges taken on certain long-lived store related assets) in the same prior-year period. GAAP operating margin in fiscal 2022 increased 36.7% to 9.9%, from negative 26.8% in the same prior-year period, driven primarily by overall leveraging of expenses. The impact of currency on operating margin was minimal for the six months ended July 31, 2021.

For the six months ended July 31, 2021, adjusted earnings from operations was $114.5 million, compared to adjusted loss from operations of $109.5 million for the six months ended August 1, 2020. Adjusted operating margin improved 26.6% to 10.0% for the six months ended July 31, 2021, from negative 16.6% in the same prior-year period, driven primarily by overall leveraging of expenses.

Outlook

Given the current circumstances regarding the coronavirus (or “COVID-19”) crisis and its uncertain impact on our operations, we are not providing detailed guidance for the third quarter or the full fiscal year ending January 29, 2022. We expect revenues in the third quarter of fiscal 2022 to be slightly negative to flat versus the third quarter of fiscal 2020 as pandemic-related traffic declines are almost offset by continued momentum in our global e-commerce business and the favorable shift of European wholesale shipments from the second quarter into the third quarter.

For the full fiscal year 2022, assuming no additional COVID-related shutdowns past the second quarter, we expect revenues to be down mid-single digits versus fiscal 2020 and operating margin to reach approximately 10.0%. The expectations for the full year also assume a return to a normal cadence of product development for our European wholesale business. These comparisons are versus the pre-pandemic periods from two fiscal years prior in order to provide a more normalized comparison.

COVID-19 Second Quarter Business Update

The COVID-19 pandemic is continuing to impact the Company’s businesses. During the second quarter of fiscal 2022, the Company experienced lower net revenue compared to the second quarter of fiscal 2020 as it remained challenged by lower demand, capacity restrictions and temporary store closures. In light of the current environment, we continue to strategically manage expenses in order to protect profitability.

During the second quarter of fiscal 2022, the Company gradually reopened its stores that were closed at the end of the first quarter of fiscal 2022 due to COVID-19 restrictions. The overall impact resulted in stores being closed for approximately 5% of the total days during the second quarter of fiscal 2022, primarily in Europe and Canada. As of July 31, 2021, 100% of our stores were open.

Dividend

The Company’s Board of Directors has approved a quarterly cash dividend of $0.1125 per share on the Company’s common stock. The dividend will be payable on September 24, 2021 to shareholders of record as of the close of business on September 8, 2021.

Share Repurchase

The Company announced today that its Board of Directors has authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $200 million of its common stock. The newly authorized $200 million program includes $48 million remaining under the Company’s previously authorized $500 million repurchase program. Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time, without prior notice.

Presentation of Non-GAAP Information

The financial information presented in this release includes non-GAAP financial measures, such as adjusted results, constant currency financial information, free cash flows and return on invested capital. For the three months and six months ended July 31, 2021, August 1, 2020 and August 3, 2019, the adjusted results exclude the impact of certain professional service and legal fees and related (credits) costs, certain separation charges, asset impairment charges, net gains on lease modifications, non-cash amortization of debt discount on the Company’s convertible senior notes, the related income tax effects of the foregoing items, as well as the impact from changes in the income tax law on deferred income taxes in certain tax jurisdictions, net income tax settlements and adjustments to specific uncertain income tax positions, as well as certain discrete income tax adjustments, where applicable. These non-GAAP measures are provided in addition to, and not as alternatives for, the Company’s reported GAAP results.

The Company has excluded these items from its adjusted financial measures primarily because it believes these items are not indicative of the underlying performance of its business and the adjusted financial information provided is useful for investors to evaluate the comparability of the Company’s operating results and its future outlook (when reviewed in conjunction with the Company’s GAAP financial statements). A reconciliation of reported GAAP results to comparable non-GAAP results is provided.

This release also includes certain constant currency financial information. Foreign currency exchange rate fluctuations affect the amount reported from translating the Company’s foreign revenue, expenses and balance sheet amounts into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results under GAAP. The Company provides constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. To calculate net revenue and earnings (loss) from operations on a constant currency basis, actual or forecasted results for the current-year period are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency different from the functional currency of that entity when exchange rates fluctuate. However, in calculating the estimated impact of currency on our earnings (loss) per share for our actual or forecasted results, the Company estimates gross margin (including the impact of merchandise-related hedges) and expenses using the appropriate prior-year rates, translates the estimated foreign earnings at the comparable prior-year rates, and excludes the year-over-year earnings impact of gains or losses arising from balance sheet remeasurement and foreign currency contracts not designated as merchandise hedges. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

The Company also includes information regarding its free cash flows in this release. The Company calculates free cash flows as cash flows from operating activities less (i) purchases of property and equipment and (ii) payments for property and equipment under finance leases. Free cash flows are not intended to be an alternative to cash flows from operating activities as a measure of liquidity, but rather to provide additional visibility to investors regarding how much cash is generated for discretionary and non-discretionary items after deducting purchases of property and equipment and payments for property and equipment under finance leases. Free cash flow information presented may not be comparable to similarly titled measures reported by other companies. A reconciliation of reported GAAP cash flows from operating activities to the comparable non-GAAP free cash flow measure is provided.

The Company also includes information regarding its return on invested capital (or “ROIC”) in this release. The Company defines ROIC as adjusted net operating profit after income taxes divided by two-year average invested capital. The Company believes ROIC is a useful financial measure for investors in evaluating how efficiently the Company deploys its capital. The Company’s method of calculating ROIC may differ from other companies’ methods and, therefore, might not be comparable.

Investor Conference Call

The Company will hold a conference call at 4:45 pm (ET) on August 25, 2021 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.guess.com via the “Investor Relations” link. The webcast will be archived on the website for 30 days.

About Guess?

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, eyewear, footwear and other related consumer products. Guess? products are distributed through branded Guess? stores as well as better department and specialty stores around the world. As of July 31, 2021, the Company directly operated 1,046 retail stores in the Americas, Europe and Asia. The Company’s partners and distributors operated 551 additional retail stores worldwide. As of July 31, 2021, the Company and its partners and distributors operated in approximately 100 countries worldwide. For more information about the Company, please visit www.guess.com.

Forward-Looking Statements

Except for historical information contained herein, certain matters discussed in this press release or the related conference call and webcast, including statements concerning the potential actions and impacts related to the COVID-19 pandemic; statements concerning the Company’s future outlook including with respect to the third quarter and full year of fiscal 2022 as well as fiscal 2024; statements concerning the Company’s expectations, goals, future prospects, global cost reduction opportunities, longer-term operating margin, revenue, EPS and ROIC expectations, capital allocation plans, cash needs and current business strategies and strategic initiatives; and statements expressing optimism or pessimism about future operating results and growth opportunities are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are frequently indicated by terms such as “expect,” “could,” “will,” “should,” “goal,” “strategy,” “believe,” “estimate,” “continue,” “outlook,” “plan,” “create,” “see,” and similar terms, are only expectations, and involve known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from what is currently anticipated. Factors which may cause actual results in future periods to differ materially from current expectations include, among others: our ability to maintain our brand image and reputation; domestic and international economic or political conditions, including economic and other events that could negatively impact consumer confidence and discretionary consumer spending; the continuation or worsening of impacts related to the COVID-19 pandemic, including business, financial, human capital, litigation and other impacts to the Company and its partners; our ability to successfully negotiate rent relief or other lease-related terms with our landlords; our ability to maintain adequate levels of liquidity; changes to estimates related to impairments, inventory and other reserves, including the impact of the CARES Act, which were made using the best information available at the time; changes in the competitive marketplace and in our commercial relationships; our ability to anticipate and adapt to changing consumer preferences and trends; our ability to manage our inventory commensurate with customer demand; risks related to the timing and costs of delivering merchandise to our stores and our wholesale customers; unexpected or unseasonable weather conditions; our ability to effectively operate our various retail concepts, including securing, renewing, modifying or terminating leases for store locations; our ability to successfully and/or timely implement our growth strategies and other strategic initiatives; our ability to successfully implement or update information technology systems, including enhancing our global omni-channel capabilities; our ability to expand internationally and operate in regions where we have less experience, including through joint ventures; risks related to our convertible senior notes issued in April 2019, including our ability to settle the liability in cash; our ability to successfully or timely implement plans for cost reductions; our ability to effectively and efficiently manage the volume and costs associated with our European distribution centers without incurring shipment delays; our ability to attract and retain key personnel; obligations or changes in estimates arising from new or existing litigation, income tax and other regulatory proceedings; risks related to the complexity of the Tax Reform, future clarifications and legislative amendments thereto, as well as our ability to accurately interpret and predict its impact on our cash flows and financial condition; the risk of economic uncertainty associated with the United Kingdom’s departure from the European Union (“Brexit”) or any other similar referendums that may be held; the occurrence of unforeseen epidemics, such as the COVID-19 pandemic; other catastrophic events; changes in U.S. or foreign income tax or tariff policy, including changes to tariffs on imports into the U.S.; accounting adjustments to our unaudited financial statements identified during the completion of our annual independent audit of financial statements and financial controls or from subsequent events arising after issuance of this release; risk of future non-cash asset impairments, including goodwill, right-of-use lease assets and/or other store asset impairments; restructuring charges; our ability to adapt to new regulatory compliance and disclosure obligations; risks associated with our foreign operations, such as violations of laws prohibiting improper payments and the burdens of complying with a variety of foreign laws and regulations (including global data privacy regulations); risks associated with the acts or omissions of our third party vendors, including a failure to comply with our vendor code of conduct or other policies; risks associated with cyber-attacks and other cyber security risks; risks associated with our ability to properly collect, use, manage and secure consumer and employee data; risks associated with our vendors’ ability to maintain the strength and security of information technology systems; and changes in economic, political, social and other conditions affecting our foreign operations and sourcing, including the impact of currency fluctuations, global income tax rates and economic and market conditions in the various countries in which we operate. In addition to these factors, the economic, technological, managerial, and other risks identified in the Company’s most recent annual report on Form 10-K and other filings with the Securities and Exchange Commission, including but not limited to the risk factors discussed therein, could cause actual results to differ materially from current expectations. The current global economic climate, length and severity of the COVID-19 pandemic, and uncertainty surrounding potential changes in U.S. policies and regulations may amplify many of these risks. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Loss)
(amounts in thousands, except per share data)

	Three Months Ended
	July 31, 2021					August 1, 2020					August 3, 2019
	$			%		$			%		$			%
Product sales	$	606,691		96.5	%	$	386,392		97.0	%	$	664,678		97.3	%
Net royalties	21,933			3.5	%	12,147			3.0	%	18,542			2.7	%
Net revenue	628,624			100.0	%	398,539			100.0	%	683,220			100.0	%
Cost of product sales	334,538			53.2	%	251,511			63.1	%	417,554			61.1	%
Gross profit	294,086			46.8	%	147,028			36.9	%	265,666			38.9	%
Selling, general and administrative expenses	205,617			32.8	%	150,293			37.7	%	218,175			32.0	%
Asset impairment charges	1,501			0.2	%	11,969			3.0	%	1,504			0.2	%
Net gains on lease modifications	(420		)	(0.1	%)	(885		)	(0.2	%)	—			—	%
Earnings (loss) from operations	87,388			13.9	%	(14,349		)	(3.6	%)	45,987			6.7	%
Other income (expense):
Interest expense	(6,009		)	(1.0	%)	(5,941		)	(1.5	%)	(4,951		)	(0.7	%)
Interest income	461			0.1	%	436			0.1	%	313			0.0	%
Other income (expense), net	(1,001		)	(0.1	%)	5,548			1.4	%	(6,355		)	(0.9	%)
Earnings (loss) before income tax expense	80,839			12.9	%	(14,306		)	(3.6	%)	34,994			5.1	%
Income tax expense	17,692			2.9	%	6,386			1.6	%	8,818			1.3	%
Net earnings (loss)	63,147			10.0	%	(20,692		)	(5.2	%)	26,176			3.8	%
Net earnings (loss) attributable to noncontrolling interests	2,085			(0.3	%)	(334		)	(0.1	%)	854			0.1	%
Net earnings (loss) attributable to Guess?, Inc.	$	61,062		9.7	%	$	(20,358	)	(5.1	%)	$	25,322		3.7	%
Net earnings (loss) per common share attributable to common stockholders:
Basic	$	0.94				$	(0.31	)			$	0.36
Diluted	$	0.91				$	(0.31	)			$	0.35
Weighted average common shares outstanding attributable to common stockholders:
Basic	64,336					65,177					70,508
Diluted	66,074					65,177					71,356
Effective income tax rate	21.9		%			(44.6		)%			25.2		%
Adjusted selling, general and administrative expenses¹:	$	205,508		32.7	%	$	147,937		37.1	%	$	217,770		31.9	%
Adjusted earnings (loss) from operations¹:	$	88,578		14.1	%	$	(909	)	(0.2	%)	$	47,896		7.0	%
Adjusted net earnings (loss) attributable to Guess?, Inc.¹:	$	64,078		10.2	%	$	(639	)	(0.2	%)	$	27,414		4.0	%
Adjusted diluted earnings (loss) per common share attributable to common stockholders¹:	$	0.96				$	(0.01	)			$	0.38
Adjusted effective income tax rate¹:	22.0		%			156.2		%			28.2		%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Loss)
(amounts in thousands, except per share data)

	Six Months Ended
	July 31, 2021					August 1, 2020					August 3, 2019
	$			%		$			%		$			%
Product sales	$	1,105,168		96.2	%	$	633,709		96.2	%	$	1,182,551		96.9	%
Net royalties	43,458			3.8	%	25,081			3.8	%	37,360			3.1	%
Net revenue	1,148,626			100.0	%	658,790			100.0	%	1,219,911			100.0	%
Cost of product sales	642,982			56.0	%	477,533			72.5	%	772,296			63.3	%
Gross profit	505,644			44.0	%	181,257			27.5	%	447,615			36.7	%
Selling, general and administrative expenses	392,301			34.1	%	293,581			44.5	%	422,820			34.6	%
Asset impairment charges	1,942			0.2	%	64,941			9.9	%	3,279			0.3	%
Net gains on lease modifications	(2,565		)	(0.2	%)	(429		)	(0.1	%)	—			—	%
Earnings (loss) from operations	113,966			9.9	%	(176,836		)	(26.8	%)	21,516			1.8	%
Other income (expense):
Interest expense	(11,935		)	(1.0	%)	(11,403		)	(1.7	%)	(6,210		)	(0.5	%)
Interest income	835			0.1	%	1,046			0.2	%	674			0.1	%
Other expense, net	(3,702		)	(0.4	%)	(14,032		)	(2.2	%)	(4,284		)	(0.4	%)
Earnings (loss) before income tax expense (benefit)	99,164			8.6	%	(201,225		)	(30.5	%)	11,696			1.0	%
Income tax expense (benefit)	23,147			2.0	%	(19,995		)	(3.0	%)	6,101			0.5	%
Net earnings (loss)	76,017			6.6	%	(181,230		)	(27.5	%)	5,595			0.5	%
Net earnings (loss) attributable to noncontrolling interests	2,949			0.2	%	(3,206		)	(0.5	%)	1,647			0.2	%
Net earnings (loss) attributable to Guess?, Inc.	$	73,068		6.4	%	$	(178,024	)	(27.0	%)	$	3,948		0.3	%
Net earnings (loss) per common share attributable to common stockholders:
Basic	$	1.13				$	(2.72	)			$	0.05
Diluted	$	1.10				$	(2.72	)			$	0.05
Weighted average common shares outstanding attributable to common stockholders:
Basic	64,185					65,446					75,216
Diluted	65,933					65,446					76,155
Effective income tax rate	23.3		%			9.9		%			52.2		%
Adjusted selling, general and administrative expenses¹:	$	391,114		34.0	%	$	290,762		44.1	%	$	422,143		34.6	%
Adjusted earnings (loss) from operations¹:	$	114,530		10.0	%	$	(109,505	)	(16.6	%)	$	25,472		2.1	%
Adjusted net earnings (loss) attributable to Guess?, Inc.¹:	$	77,951		6.8	%	$	(119,552	)	(18.1	%)	$	7,798		0.6	%
Adjusted diluted earnings (loss) per common share attributable to common stockholders¹:	$	1.17				$	(1.83	)			$	0.10
Adjusted effective income tax rate¹:	23.2		%			4.6		%			48.4		%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries

Reconciliation of GAAP Results to Adjusted Results

(dollars in thousands)

The reconciliations of reported GAAP selling, general and administrative expenses to adjusted selling, general and administrative expenses, reported GAAP earnings (loss) from operations to adjusted earnings (loss) from operations, reported GAAP net earnings (loss) attributable to Guess?, Inc. to adjusted net earnings (loss) attributable to Guess?, Inc. and reported GAAP income tax expense (benefit) to adjusted income tax expense (benefit) follows:

	Three Months Ended
	July 31, 2021			August 1, 2020			August 3, 2019
Reported GAAP selling, general and administrative expenses	$	205,617		$	150,293		$	218,175
Certain professional service and legal fees and related credits (costs)²	(109		)	151			(405		)
Separation charges³	—			(2,507		)	—
Adjusted selling, general and administrative expenses¹	$	205,508		$	147,937		$	217,770
Reported GAAP earnings (loss) from operations	$	87,388		$	(14,349	)	$	45,987
Certain professional service and legal fees and related (credits) costs²	109			(151		)	405
Separation charges³	—			2,507			—
Asset impairment charges⁴	1,501			11,969			1,504
Net gains on lease modifications⁵	(420		)	(885		)	—
Adjusted earnings (loss) from operations¹	$	88,578		$	(909	)	$	47,896
Reported GAAP net earnings (loss) attributable to Guess?, Inc.	$	61,062		$	(20,358	)	$	25,322
Certain professional service and legal fees and related (credits) costs²	109			(151		)	405
Separation charges³	—			2,507			—
Asset impairment charges⁴	1,501			11,969			1,504
Net gains on lease modifications⁵	(420		)	(885		)	—
Amortization of debt discount⁶	2,781			2,598			2,449
Discrete tax adjustments⁷	81			8,061			—
Income tax impact from adjustments⁸	(1,036		)	(4,380		)	(2,266		)
Total adjustments affecting net earnings (loss) attributable to Guess?, Inc.	3,016			19,719			2,092
Adjusted net earnings (loss) attributable to Guess?, Inc.¹	$	64,078		$	(639	)	$	27,414
Reported GAAP income tax expense	$	17,692		$	6,386		$	8,818
Discrete tax adjustments⁷	(81		)	(8,061		)	—
Income tax impact from adjustments⁸	1,036			4,380			2,266
Adjusted income tax expense¹	$	18,647		$	2,705		$	11,084
Adjusted effective income tax rate¹	22.0		%	156.2		%	28.2		%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Reconciliation of GAAP Results to Adjusted Results (Continued)
(dollars in thousands)

	Six Months Ended
	July 31, 2021			August 1, 2020			August 3, 2019
Reported GAAP selling, general and administrative expenses	$	392,301		$	293,581		$	422,820
Certain professional service and legal fees and related credits (costs)²	(1,187		)	(139		)	(677		)
Separation charges³	—			(2,680		)	—
Adjusted selling, general and administrative expenses¹	$	391,114		$	290,762		$	422,143
Reported GAAP earnings (loss) from operations	$	113,966		$	(176,836	)	$	21,516
Certain professional service and legal fees and related (credits) costs²	1,187			139			677
Separation charges³	—			2,680			—
Asset impairment charges⁴	1,942			64,941			3,279
Net gains on lease modifications⁵	(2,565		)	(429		)	—
Adjusted earnings (loss) from operations¹	$	114,530		$	(109,505	)	$	25,472
Reported GAAP net earnings (loss) attributable to Guess?, Inc.	$	73,068		$	(178,024	)	$	3,948
Certain professional service and legal fees and related (credits) costs²	1,187			139			677
Separation charges³	—			2,680			—
Asset impairment charges⁴	1,942			64,941			3,279
Net gains on lease modifications⁵	(2,565		)	(429		)	—
Amortization of debt discount⁶	5,562			5,197			2,662
Discrete tax adjustments⁷	228			170			—
Income tax impact from adjustments⁸	(1,471		)	(14,226		)	(2,768		)
Total adjustments affecting net earnings (loss) attributable to Guess?, Inc.	4,883			58,472			3,850
Adjusted net earnings (loss) attributable to Guess?, Inc.¹	$	77,951		$	(119,552	)	$	7,798
Reported GAAP income tax expense (benefit)	$	23,147		$	(19,995	)	$	6,101
Discrete tax adjustments⁷	(228		)	(170		)	—
Income tax impact from adjustments⁸	1,471			14,226			2,768
Adjusted income tax expense (benefit)¹	$	24,390		$	(5,939	)	$	8,869
Adjusted effective income tax rate¹	23.2		%	4.6		%	48.4		%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(dollars in thousands)

	Three Months Ended									% change
	July 31, 2021			August 1, 2020			August 3, 2019			August 1, 2020		August 3, 2019
Net revenue:
Americas Retail	$	186,297		$	110,065		$	198,966		69	%	(6	%)
Americas Wholesale	49,858			20,285			41,902			146	%	19	%
Europe	322,723			205,851			340,509			57	%	(5	%)
Asia	47,813			50,191			83,301			(5	%)	(43	%)
Licensing	21,933			12,147			18,542			81	%	18	%
Total net revenue	$	628,624		$	398,539		$	683,220		58	%	(8	%)

Earnings (loss) from operations:
Americas Retail	$	37,916		$	(4,704	)	$	5,957		(906	%)	536	%
Americas Wholesale	12,944			1,688			8,422			667	%	54	%
Europe	51,417			20,795			51,594			147	%	(0	%)
Asia	(4,847		)	(3,367		)	(4,800		)	44	%	1	%
Licensing	20,154			11,511			15,547			75	%	30	%
Total segment earnings from operations	117,584			25,923			76,720			354	%	53	%
Corporate overhead	(29,115		)	(29,188		)	(29,229		)	(0	%)	(0	%)
Asset impairment charges	(1,501		)	(11,969		)	(1,504		)	(87	%)	(0	%)
Net gains on lease modifications	420			885			—			(53	%)
Total earnings (loss) from operations	$	87,388		$	(14,349	)	$	45,987		(709	%)	90	%

Operating margins:
Americas Retail	20.4		%	(4.3		%)	3.0		%
Americas Wholesale	26.0		%	8.3		%	20.1		%
Europe	15.9		%	10.1		%	15.2		%
Asia	(10.1		%)	(6.7		%)	(5.8		%)
Licensing	91.9		%	94.8		%	83.8		%
GAAP operating margin for total Company	13.9		%	(3.6		%)	6.7		%
Certain professional service and legal fees and related (credits) costs^{1, 2}	0.0		%	(0.0		%)	0.1		%
Separation charges^{1, 3}	0.1		%	0.6		%	—		%
Asset impairment charges^{1, 4}	0.2		%	3.0		%	0.2		%
Net gains on lease modifications^{1, 5}	(0.1		%)	(0.2		%)	—		%
Adjusted operating margin for total Company¹	14.1		%	(0.2		%)	7.0		%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Consolidated Segment Data
(dollars in thousands)

	Six Months Ended									% change
	July 31, 2021			August 1, 2020			August 3, 2019			August 1, 2020		August 3, 2019
Net revenue:
Americas Retail	$	341,832		$	184,649		$	375,389		85	%	(9	%)
Americas Wholesale	95,288			46,160			88,107			106	%	8	%
Europe	564,575			312,324			550,564			81	%	3	%
Asia	103,473			90,576			168,491			14	%	(39	%)
Licensing	43,458			25,081			37,360			73	%	16	%
Total net revenue	$	1,148,626		$	658,790		$	1,219,911		74	%	(6	%)

Earnings (loss) from operations:
Americas Retail	$	58,190		$	(41,377	)	$	4,145		(241	%)	1,304	%
Americas Wholesale	24,499			3,312			16,236			640	%	51	%
Europe	55,615			(23,611		)	35,267			(336	%)	58	%
Asia	(6,655		)	(26,144		)	(8,003		)	(75	%)	(17	%)
Licensing	39,585			21,605			32,191			83	%	23	%
Total segment earnings (loss) from operations	171,234			(66,215		)	79,836			(359	%)	114	%
Corporate overhead	(57,891		)	(46,109		)	(55,041		)	26	%	5	%
Asset impairment charges	(1,942		)	(64,941		)	(3,279		)	(97	%)	(41	%)
Net gains on lease modifications	2,565			429			—			498	%
Total earnings (loss) from operations	$	113,966		$	(176,836	)	$	21,516		(164	%)	430	%

Operating margins:
Americas Retail	17.0		%	(22.4		%)	1.1		%
Americas Wholesale	25.7		%	7.2		%	18.4		%
Europe	9.9		%	(7.6		%)	6.4		%
Asia	(6.4		%)	(28.9		%)	(4.7		%)
Licensing	91.1		%	86.1		%	86.2		%
GAAP operating margin for total Company	9.9		%	(26.8		%)	1.8		%
Certain professional service and legal fees and related (credits) costs^{1, 2}	0.1		%	0.0		%	0.0		%
Separation charges^{1, 3}	0.0		%	0.4		%	—		%
Asset impairment charges^{1, 4}	0.2		%	9.9		%	0.3		%
Net gains on lease modifications^{1, 5}	(0.2		%)	(0.1		%)	—		%
Adjusted operating margin for total Company¹	10.0		%	(16.6		%)	2.1		%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Constant Currency Financial Measures
(dollars in thousands)

	Three Months Ended
	July 31, 2021							August 1, 2020		% change
	As Reported		Foreign Currency Impact			Constant Currency		As Reported		As Reported		Constant Currency
Net revenue:
Americas Retail	$	186,297	$	(3,448	)	$	182,849	$	110,065	69	%	66	%
Americas Wholesale	49,858		(1,722		)	48,136		20,285		146	%	137	%
Europe	322,723		(18,375		)	304,348		205,851		57	%	48	%
Asia	47,813		(2,690		)	45,123		50,191		(5	%)	(10	%)
Licensing	21,933		—			21,933		12,147		81	%	81	%
Total net revenue	$	628,624	$	(26,235	)	$	602,389	$	398,539	58	%	51	%

	July 31, 2021							August 3, 2019		% change
	As Reported		Foreign Currency Impact			Constant Currency		As Reported		As Reported		Constant Currency
Net revenue:
Americas Retail	$	186,297	$	(937	)	$	185,360	$	198,966	(6	%)	(7	%)
Americas Wholesale	49,858		25			49,883		41,902		19	%	19	%
Europe	322,723		(16,224		)	306,499		340,509		(5	%)	(10	%)
Asia	47,813		(1,834		)	45,979		83,301		(43	%)	(45	%)
Licensing	21,933		—			21,933		18,542		18	%	18	%
Total net revenue	$	628,624	$	(18,970	)	$	609,654	$	683,220	(8	%)	(11	%)

Guess?, Inc. and Subsidiaries
Constant Currency Financial Measures
(dollars in thousands)

	Six Months Ended
	July 31, 2021							August 1, 2020		% change
	As Reported		Foreign Currency Impact			Constant Currency		As Reported		As Reported		Constant Currency
Net revenue:
Americas Retail	$	341,832	$	(5,437	)	$	336,395	$	184,649	85	%	82	%
Americas Wholesale	95,288		(2,913		)	92,375		46,160		106	%	100	%
Europe	564,575		(36,587		)	527,988		312,324		81	%	69	%
Asia	103,473		(6,134		)	97,339		90,576		14	%	7	%
Licensing	43,458		—			43,458		25,081		73	%	73	%
Total net revenue	$	1,148,626	$	(51,071	)	$	1,097,555	$	658,790	74	%	67	%

	July 31, 2021							August 3, 2019		% change
	As Reported		Foreign Currency Impact			Constant Currency		As Reported		As Reported		Constant Currency
Net revenue:
Americas Retail	$	341,832	$	(1,307	)	$	340,525	$	375,389	(9	%)	(9	%)
Americas Wholesale	95,288		294			95,582		88,107		8	%	8	%
Europe	564,575		(25,745		)	538,830		550,564		3	%	(2	%)
Asia	103,473		(3,078		)	100,395		168,491		(39	%)	(40	%)
Licensing	43,458		—			43,458		37,360		16	%	16	%
Total net revenue	$	1,148,626	$	(29,836	)	$	1,118,790	$	1,219,911	(6	%)	(8	%)

Guess?, Inc. and Subsidiaries
Selected Condensed Consolidated Balance Sheet Data
(in thousands)

	July 31, 2021		January 30, 2021		August 1, 2020		August 3, 2019

ASSETS

Cash and cash equivalents	$	458,914	$	469,110	$	327,970	$	131,060

Receivables, net	299,915		314,147		246,471		292,985

Inventories	430,289		389,144		419,427		484,236

Other current assets	74,771		60,123		80,069		59,226

Property and equipment, net	210,515		216,196		240,081		302,906

Restricted cash	230		235		228		519

Operating lease right-of-use assets	727,636		764,804		766,853		900,062

Other assets	254,631		252,109		229,630		231,210

Total assets	$	2,456,901	$	2,465,868	$	2,310,729	$	2,402,204

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current portion of borrowings and finance lease obligations	$	21,193	$	38,710	$	42,321	$	32,554

Current operating lease liabilities	214,392		222,800		235,749		213,912

Other current liabilities	479,567		501,029		452,410		426,886

Long-term debt and finance lease obligations	79,924		68,554		66,069		35,512

Convertible senior notes, net	264,604		258,614		252,988		242,055

Long-term operating lease liabilities	623,040		662,657		659,118		747,791

Other long-term liabilities	138,084		144,004		143,225		125,915

Redeemable and nonredeemable noncontrolling interests	25,779		25,837		20,581		22,707

Guess?, Inc. stockholders’ equity	610,318		543,663		438,268		554,872

Total liabilities and stockholders’ equity	$	2,456,901	$	2,465,868	$	2,310,729	$	2,402,204

Guess?, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Data
(in thousands)

	Six Months Ended
	July 31, 2021			August 1, 2020			August 3, 2019
Net cash provided by (used in) operating activities	$	42,976		$	40,685		$	(22,957	)
Net cash used in investing activities	(20,806		)	(11,970		)	(33,868		)
Net cash provided by (used in) financing activities	(26,639		)	13,585			(18,549		)
Effect of exchange rates on cash, cash equivalents and restricted cash	(5,732		)	1,070			(4,042		)
Net change in cash, cash equivalents and restricted cash	(10,201		)	43,370			(79,416		)
Cash, cash equivalents and restricted cash at the beginning of the year	469,345			284,828			210,995
Cash, cash equivalents and restricted cash at the end of the period	$	459,144		$	328,198		$	131,579

Supplemental information:
Depreciation and amortization	$	27,918		$	32,250		$	37,225
Total lease costs (excluding finance lease cost)	$	138,364		$	147,058		$	180,307

Guess?, Inc. and Subsidiaries
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow
(in thousands)

	Six Months Ended
	July 31, 2021			August 1, 2020			August 3, 2019

Net cash provided by (used in) operating activities	$	42,976		$	40,685		$	(22,957	)
Less: Purchases of property and equipment	(21,601		)	(10,099		)	(34,551		)
Less: Payments for property and equipment under finance leases	(2,911		)	(1,859		)	(1,202		)
Free cash flow	$	18,464		$	28,727		$	(58,710	)

Guess?, Inc. and Subsidiaries
Retail Store Data
Global Store and Concession Count

	Stores			Concessions
Region	Total	Directly Operated	Partner Operated	Total	Directly Operated	Partner Operated
	As of July 31, 2021
United States	245	244	1	1	—	1
Canada	74	74	—	—	—	—
Central and South America	106	71	35	29	29	—
Total Americas	425	389	36	30	29	1
Europe and the Middle East	745	524	221	44	44	—
Asia and the Pacific	427	133	294	263	91	172
Total	1,597	1,046	551	337	164	173

	As of August 1, 2020
United States	259	257	2	1	—	1
Canada	79	79	—	—	—	—
Central and South America	110	72	38	27	27	—
Total Americas	448	408	40	28	27	1
Europe and the Middle East	742	515	227	38	38	—
Asia and the Pacific	432	161	271	303	115	188
Total	1,622	1,084	538	369	180	189

	As of August 3, 2019
United States	287	285	2	1	—	1
Canada	80	80	—	—	—	—
Central and South America	111	71	40	27	27	—
Total Americas	478	436	42	28	27	1
Europe and the Middle East	726	510	216	37	37	—
Asia and the Pacific	520	216	304	337	162	175
Total	1,724	1,162	562	402	226	176

Guess?, Inc. and Subsidiaries
Adjusted Earnings Per Share for the Fiscal Year
(in thousands)

	FY2020			*FY2024E¹⁵**

Reported GAAP net earnings attributable to Guess?, Inc.	$	95,975
Certain professional service and legal fees and related (credits) costs²	(857		)
Separation charges³	438
Asset impairment charges⁴	9,977
Amortization of debt discount⁶	7,558
Income tax impact from adjustments^{8, 9}	(8,055		)
Total adjustments affecting net earnings attributable to Guess?, Inc.	9,061
Adjusted net earnings attributable to Guess?, Inc.¹	$	105,036

GAAP earnings per share	$	1.33		$	3.36
Certain professional service and legal fees and related (credits) costs²	$	(0.01	)	$	—
Separation charges³	$	—		$	—
Asset impairment charges⁴	$	0.12		$	—
Amortization of debt discount⁶	$	0.08		$	0.14
Income tax impact from adjustments^8,9	$	(0.07	)	$	—
Adjusted earnings per share¹	$	1.45		$	3.50
______________________________________________________________________
* Amounts represent estimates for future fiscal years.
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Return on Invested Capital for the Fiscal Year
(in thousands)

	FY2019			FY2020			FY2020 2-Year Average			FY2023E			FY2024E			FY2024E 2-Year Average
Total assets¹⁰	$	1,649,205		$	2,428,962		$	2,039,084		$	2,747,000		$	2,953,000		$	2,850,000
Less: Cash and cash equivalents	(210,460		)	(284,613		)	(247,537		)	(634,000		)	(806,000		)		(720,000	)
Less: Operating right-of-use assets¹⁰	—			(851,990		)	(425,995		)	(760,000		)	(764,000		)		(762,000	)
Less: Accounts payable	(286,657		)	(232,761		)	(259,709		)	(333,000		)	(346,000		)		(339,500	)
Less: Accrued expenses	(252,392		)	(204,096		)	(228,244		)	(208,000		)	(209,000		)		(208,500	)
Add: Accrual for European Commission fine¹¹	45,619			—			22,809			—			—				—
Average invested capital	$	945,315		$	855,502		$	900,408		$	812,000		$	828,000		$	820,000

							FY2020									FY2024E
Reported GAAP earnings from operations							$	140,671								$	335,000
Less: Certain professional service and legal fees and related (credits) costs²							(857		)								—
Add: Asset impairment charges⁴							9,977										—
Add: Separation charges³							438										—
Adjusted earnings from operations¹²							$	150,229								$	335,000
Less: Asset impairments⁴							(9,977		)								—
Less: Other income (expense), net							(2,529		)								(1,400	)
Less: Income tax expense¹³							(29,886		)								(83,400	)
Adjusted net operating profit after taxes¹							$	107,837								$	250,200

Non-GAAP return on invested capital¹⁴							12		%								31	%
______________________________________________________________________
See page 22 for footnotes.

Guess?, Inc. and Subsidiaries
Footnotes to Condensed Consolidated Financial Data

Footnotes:

¹		The adjusted results reflect the exclusion of certain professional service and legal fees and related (credits) costs, certain separation charges, asset impairment charges, net gains on lease modifications, non-cash amortization of debt discount on the Company’s convertible senior notes, the related income tax impacts of these adjustments, as well as certain discrete income tax adjustments, where applicable. A complete reconciliation of actual results to adjusted results is presented in the “Reconciliation of GAAP Results to Adjusted Results.”

²		Amounts recorded represent certain professional service and legal fees and related (credits) costs, which the Company otherwise would not have incurred as part of its business operations.

³		Amounts represent certain separation-related charges due to headcount reduction in response to the pandemic and due to the separation of our former Chief Executive Officer.

⁴		Amounts represent asset impairment charges related primarily to impairment of operating lease right-of-use assets and property and equipment related to certain retail locations resulting from lower revenue and future cash flow projections from the ongoing effects of the COVID-19 pandemic and expected store closures.

⁵		Amounts recorded represent net gains on lease modifications related primarily to the early termination of certain lease agreements.

⁶		In April 2019, the Company issued $300 million principal amount of 2.00% convertible senior notes due 2024 (the “Notes”) in a private offering. The Company has separated the Notes into liability (debt) and equity (conversion option) components. The debt discount, which represents an amount equal to the fair value of the equity component, is amortized as non-cash interest expense over the term of the Notes. Estimates of adjusted earnings per share for the full fiscal year 2024 exclude the amortization anticipated to be recorded in those years as such amounts are known. The Company has not assumed any potential share dilution related to the convert or related warrants.

⁷		Amounts represent discrete income tax adjustments related primarily to the impacts from cumulative valuation allowances and the income tax benefits from an income tax rate change due to net operating loss carrybacks.

⁸		The income tax effect of certain professional service and legal fees and related (credits) costs, separation charges, asset impairment charges, net gains on lease modifications and the amortization of debt discount was based on the Company’s assessment of deductibility using the statutory income tax rate (inclusive of the impact of valuation allowances) of the tax jurisdiction in which the charges were incurred.

⁹		During fiscal year 2020, the Company recorded the impact from changes in the tax law on deferred taxes in certain tax jurisdictions, net tax settlements and adjustments to specific uncertain tax positions.

¹⁰		During fiscal year 2020, the Company adopted a comprehensive new lease standard which superseded previous lease guidance. The standard requires a lessee to recognize an asset related to the right to use the underlying asset and a liability that approximates the present value of the lease payments over the term of contracts that qualify as leases under the new guidance. The adoption of the standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities.

¹¹		During fiscal year 2019, the Company recognized a charge of €39.8 million ($45.6 million) related to a fine by the European Commission related to its inquiry concerning potential violations of European Union competition rules by the Company.

¹²		The adjusted earnings from operations for fiscal year 2020 reflect the exclusion of certain items which the Company believes are not indicative of the underlying performance of its business.

¹³		Income taxes are calculated using the adjusted effective income tax rate for fiscal year 2020 of 21.7% and a projection of 25% for the fiscal 2024 effective income tax rate.

¹⁴		The Company defines return on invested capital (or “ROIC”) as adjusted net operating profit after taxes divided by two-year average invested capital.

¹⁵		The Company is unable to predict future amounts for items excluded for non-GAAP for fiscal year 2024, with the exception of amounts related to the amortization of debt discount, as these expenditures and credits are inconsistent in amount and frequency and certain elements used to estimate such items have not yet occurred or are out of the Company’s control. As such, the Company has not considered any future charges in the accompanying GAAP outlook.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210825005751/en/

Guess?, Inc.

Fabrice Benarouche

VP, Finance and Investor Relations

(213) 765-5578

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Retail Department Stores Fashion

MEDIA:

August 25, 2021 4:18 pm

SelectQuote, Inc. Reports Fourth Quarter 2021 and Fiscal Year 2021 Results

SelectQuote, Inc. Reports Fourth Quarter 2021 and Fiscal Year 2021 Results

Fourth Quarter of Fiscal Year 2021 – Consolidated Earnings Highlights

Revenue of $188.4 million, Up 33% Year-Over-Year
Net Income of $3.3 million, Down $16.7 million Year-Over-Year
Adjusted EBITDA of $21.3 million, Down 47% Year-Over-Year*

Fourth Quarter of Fiscal Year 2021 – Segment Highlights

Senior

Revenue of $124.4 million, Up 42% Year-Over-Year
Adjusted EBITDA of $24.8 million, Down 26% Year-Over-Year*
Approved Medicare Advantage policies grew 54% Year-Over-Year

Life

Revenue of $59.9 million, Up 41% Year-Over-Year
Final expense premiums grew 79% Year-Over-Year

Auto & Home

Revenue of $7.2 million, Down 41% Year-Over-Year
Total Auto & Home premiums declined 37% Year-Over-Year

OVERLAND PARK, Kan.–(BUSINESS WIRE)–
SelectQuote, Inc. (NYSE: SLQT), reported consolidated revenue for the fourth quarter of fiscal year 2021 of $188.4 million, which was a 33% increase year-over-year. Consolidated net income for the fourth quarter of fiscal year 2021 was $3.3 million, which was a $16.7 million decrease year-over-year. Finally, consolidated Adjusted EBITDA for the fourth quarter of fiscal year 2021 was $21.3 million, which was a 47% decrease year-over-year.

Consolidated revenue for the fiscal year ended June 30, 2021, was $937.8 million, a 76% increase over consolidated revenue for the fiscal year ended June 30, 2020, of $531.5 million. Consolidated net income for the fiscal year ended June 30, 2021, was $131.0 million, an increase of $49.9 million over consolidated net income for the fiscal year ended June 30, 2020, of $81.1 million. Finally, consolidated Adjusted EBITDA for the fiscal year ended June 30, 2021, was $228.0 million compared to consolidated Adjusted EBITDA of $154.0 million for the fiscal year ended June 30, 2020, a 48% increase.

Chief Executive Officer Tim Danker commented, “2021 was a landmark year for SelectQuote both in terms of our growth but also in the significant opportunity established through the initiation of our Population Health strategy. For the full year we grew Adjusted EBITDA by $74.0 million or nearly 50% following growth of 46% in 2020. We continue to have high conviction in our differentiated model and our ability to scale quality growth in 2022 and beyond. We believe that SelectQuote’s strong connection with our end customers creates differentiated value and we expect Population Health to strengthen that bond in the years to come.”

Chief Financial Officer Raffaele Sadun added, “Our Senior full-year revenues grew 101% year-over-year, which follows full-year growth of 88% in fiscal 2020. New MA approved policies also grew in excess of 100% at attractive unit economics with a Revenue to CAC of 3.0x. Our MA LTV was down 2% for the year, which includes a full-year true-up in our 4th Quarter results for additional provision due to higher than expected intra-year lapse rates. Despite some persistency pressure compared to original expectations, we expect cohort-level IRRs to remain very attractive.”

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12.

Segment Results

We currently report on three segments: 1) Senior, 2) Life and 3) Auto & Home. The performance measures of the segments include total revenue and Adjusted EBITDA. Costs of revenue, marketing and advertising, and technical development operating costs and expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, and technical development operating costs and expenses are allocated to each segment based on varying metrics such as headcount. Adjusted EBITDA is calculated as total revenue for the applicable segment less direct and allocated costs of revenue, marketing and advertising, technical development, and general and administrative operating costs and expenses, excluding depreciation and amortization expense; gain or loss on disposal of property, equipment, and software; share-based compensation expense; restructuring expenses; and non-recurring expenses such as severance payments and transaction costs.

Senior

Financial Results

The following table provides the financial results for the Senior segment for the periods presented:

(in thousands)	4Q 2021			4Q 2020			% Change		FY 2021			FY 2020			% Change
Revenue	$	124,391		$	87,865		42	%	$	728,701		$	361,673		101	%
Adjusted EBITDA*	24,830			33,387			(26)	%	243,777			145,738			67	%
Adjusted EBITDA Margin*	20		%	38		%			33		%	40		%

Operating Metrics

Submitted Policies

Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to them to submit it to the insurance carrier partner. The applicant may have additional actions to take, such as providing additional information, before the application will be reviewed by the insurance carrier, such as providing additional information.

The following table shows the number of submitted policies for the periods presented:

	4Q 2021	4Q 2020	% Change		FY 2021	FY 2020	% Change
Medicare Advantage	95,549	59,276	61	%	550,321	264,546	108	%
Medicare Supplement	2,498	7,702	(68)	%	26,785	24,085	11	%
Dental, Vision and Hearing	30,287	17,212	76	%	132,106	70,018	89	%
Prescription Drug Plan	1,193	2,378	(50)	%	11,436	13,513	(15)	%
Other	3,884	2,278	71	%	16,487	5,890	180	%
Total	133,411	88,846	50	%	737,135	378,052	95	%

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12.

Approved Policies

Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force.

The following table shows the number of approved policies for the periods presented:

	4Q 2021	4Q 2020	% Change		FY 2021	FY 2020	% Change
Medicare Advantage	83,448	54,305	54	%	467,585	225,404	107	%
Medicare Supplement	2,062	6,362	(68)	%	21,911	18,102	21	%
Dental, Vision and Hearing	26,645	16,564	61	%	111,015	55,556	100	%
Prescription Drug Plan	1,191	2,481	(52)	%	10,747	13,009	(17)	%
Other	3,880	2,058	89	%	14,089	4,654	203	%
Total	117,226	81,770	43	%	625,347	316,725	97	%

Lifetime Value of Commissions per Approved Policy

Lifetime value of commissions per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints. The lifetime value of commissions per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions.

The following table shows the lifetime value of commissions per approved policy for the periods presented:

(dollars per policy):	4Q 2021		4Q 2020		% Change		FY 2021		FY 2020		% Change
Medicare Advantage	$	1,121	$	1,256	(11)	%	$	1,260	$	1,287	(2)	%
Medicare Supplement	1,323		1,382		(4)	%	1,269		1,376		(8)	%
Dental, Vision and Hearing	121		125		(3)	%	136		140		(3)	%
Prescription Drug Plan	180		226		(20)	%	224		229		(2)	%
Other	160		(48)		(436)	%	113		34		232	%

Per Unit Economics

Per unit economics represents total Medicare Advantage and Medicare Supplement commissions, other product commissions, other revenues, and costs associated with the Senior segment, each shown as per number of approved Medicare Advantage and Medicare Supplement approved policies over a given time period. Management assesses the business on a per unit basis to help ensure that the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. Because not all acquired leads result in a successful policy sale, all per policy metrics are based on approved policies, which is the measure that triggers revenue recognition.

The Medicare Advantage and Medicare Supplement commission per MA/MS policy represents the lifetime value of commissions for policies sold in the period. Other commission per MA/MS policy represents the lifetime value of commissions for other products sold in the period, including dental, vision and hearing, prescription drug plan, and other products, which management views as additional commission revenue on our agents’ core function of MA/MS policy sales. Other per MA/MS policy represents the production bonuses, lead sales revenue from InsideResponse, and updated estimates of prior period variable consideration based on actual policy renewals in the current period. Total operating expenses per MA/MS policy represent all of the operating expenses within the Senior segment. The Revenue to customer acquisition cost (“CAC”) multiple represents total revenue per MA/MS policy as a multiple of total marketing acquisition cost, which represents the direct costs of acquiring leads which is included in marketing and advertising expense within the total operating expenses per MA/MS policy.

The following table shows per unit economics for the periods presented. Based on the seasonality of the Senior segment and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. All per MA/MS policy metrics below are based on the sum of approved MA/MS policies, as both products have similar commission profiles. These metrics are the basis on which management assesses the business:

	Twelve Months Ended June 30,
(dollars per approved policy):	2021			2020			% Change
Medicare Advantage and Medicare Supplement approved policies	489,496			243,506			101	%
Medicare Advantage and Medicare Supplement commission per MA / MS policy	$	1,260		$	1,293		(3)	%
Other commission per MA/MS policy	39			45			(13)	%
Other per MA / MS policy	190			147			29	%
Total revenue per MA / MS policy	1,489			1,485			0	%
Total operating expenses per MA / MS policy	(991)			(887)			12	%
Adjusted EBITDA per MA / MS policy*	$	498		$	598		(17)	%
Adjusted EBITDA Margin per MA / MS policy*	33		%	40		%	(17)	%
Revenue / CAC multiple	3.0X			3.5X

Life

Financial Results

The following table provides the financial results for the Life segment for the periods presented:

(in thousands)	4Q 2021			4Q 2020			% Change		FY 2021			FY 2020			% Change
Revenue	$	59,905		$	42,423		41	%	$	185,503		$	129,967		43	%
Adjusted EBITDA*	10,310			12,258			(16)	%	30,376			27,812			9	%
Adjusted EBITDA Margin*	17		%	29		%			16		%	21		%

Operating Metrics

Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Core premiums include term life and permanent life insurance policies while ancillary premiums include various smaller products. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Life segment.

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12.

The following table shows core, final expense, and ancillary premiums for the periods presented:

(in thousands)	4Q 2021		4Q 2020		% Change		FY 2021		FY 2020		% Change
Core Premiums	$	19,983	$	18,965	5	%	$	76,251	$	75,451	1	%
Final Expense Premiums	33,700		18,860		79	%	88,294		34,839		153	%
Ancillary Premiums	976		732		33	%	3,166		2,507		26	%

Auto & Home

Financial Results

The following table provides the financial results for the Auto & Home segment for the periods presented:

(in thousands)	4Q 2021			4Q 2020			% Change		FY 2021			FY 2020			% Change
Revenue	$	7,161		$	12,127		(41)	%	$	30,913		$	41,189		(25)	%
Adjusted EBITDA*	1,316			3,104			(58)	%	8,178			8,699			(6)	%
Adjusted EBITDA Margin*	18		%	26		%			26		%	21		%

Operating Metrics

Auto & Home premium represents the total premium value of all new policies that were approved by our insurance carrier partners during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Auto & Home segment.

The following table shows premiums for the periods presented:

(in thousands):	4Q 2021		4Q 2020		% Change		FY 2021		FY 2020		% Change
Premiums	$	13,431	$	21,162	(37)	%	$	55,596	$	70,087	(21)	%

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12.

Earnings Conference Call

SelectQuote, Inc. will host a conference call with the investment community today, Wednesday, August 25, 2021, beginning at 5 p.m. ET. To register for this conference call, please use this link: http://www.directeventreg.com/registration/event/8844709. After registering, a confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call we suggest registering a day in advance or at minimum 10 minutes before the start of the call. The event will also be webcasted live via our investor relations website https://ir.selectquote.com/investor-home/default.aspx.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this release Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We define Adjusted EBITDA as income before interest expense, income tax expense, depreciation and amortization, and certain add-backs for non-cash or non-recurring expenses, including restructuring and share-based compensation expenses. The most directly comparable GAAP measure is net income. We monitor and have presented in this release Adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

We believe that this non-GAAP financial measure helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of this non-GAAP financial measure. Accordingly, we believe that this financial measure provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

Forward Looking Statement

This release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the ultimate duration and impact of the ongoing COVID-19 pandemic, our reliance on a limited number of insurance carrier partners and any potential termination of those relationships or failure to develop new relationships; existing and future laws and regulations affecting the health insurance market; changes in health insurance products offered by our insurance carrier partners and the health insurance market generally; insurance carriers offering products and services directly to consumers; changes to commissions paid by insurance carriers and underwriting practices; competition with brokers, exclusively online brokers and carriers who opt to sell policies directly to consumers; competition from government-run health insurance exchanges; developments in the U.S. health insurance system; our dependence on revenue from carriers in our senior segment and downturns in the senior health as well as life, automotive and home insurance industries; our ability to develop new offerings and penetrate new vertical markets; risks from third-party products; failure to enroll individuals during the Medicare annual enrollment period; our ability to attract, integrate and retain qualified personnel; our dependence on lead providers and ability to compete for leads; failure to obtain and/or convert sales leads to actual sales of insurance policies; access to data from consumers and insurance carriers; accuracy of information provided from and to consumers during the insurance shopping process; cost-effective advertisement through internet search engines; ability to contact consumers and market products by telephone; global economic conditions; disruption to operations as a result of future acquisitions; significant estimates and assumptions in the preparation of our financial statements; impairment of goodwill; potential litigation and claims, including IP litigation; our existing and future indebtedness; developments with respect to LIBOR; access to additional capital; failure to protect our intellectual property and our brand; fluctuations in our financial results caused by seasonality; accuracy and timeliness of commissions reports from insurance carriers; timing of insurance carriers’ approval and payment practices; factors that impact our estimate of the constrained lifetime value of commissions per policyholder; changes in accounting rules, tax legislation and other legislation; disruptions or failures of our technological infrastructure and platform; failure to maintain relationships with third-party service providers; cybersecurity breaches or other attacks involving our systems or those of our insurance carrier partners or third-party service providers; our ability to protect consumer information and other data; and failure to market and sell Medicare plans effectively or in compliance with laws. For a further discussion of these and other risk factors that could impact our future results and performance, see the section entitled “Risk Factors” in the most recent Annual Report on Form 10-K (the “Annual Report”) filed by us with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

About SelectQuote:

Founded in 1985, SelectQuote (NYSE: SLQT) provides solutions that help consumers protect their most valuable assets: their families, health and property. The company pioneered the direct-to-consumer model of providing unbiased comparisons from multiple, highly-rated insurance companies allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote’s success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources, scores, and routes high-quality sales leads. The company has three core business lines: SelectQuote Senior, SelectQuote Life and SelectQuote Auto and Home. SelectQuote Senior, the largest and fastest-growing business, serves the needs of a demographic that sees 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans from leading, nationally-recognized carriers, as well as prescription drug plans, dental, vision and hearing plans.

SELECTQUOTE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
	June 30,
	2021		2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	286,454	$	321,065
Restricted cash	—		47,805
Accounts receivable	113,375		83,634
Commissions receivable-current	89,120		51,209
Other current assets	4,486		10,121
Total current assets	493,435		513,834
COMMISSIONS RECEIVABLE—Net	756,777		461,752
PROPERTY AND EQUIPMENT—Net	29,510		22,150
SOFTWARE—Net	12,611		8,399
OPERATING LEASE RIGHT-OF-USE ASSETS	31,414		—
INTANGIBLE ASSETS—Net	40,670		19,673
GOODWILL	68,019		46,577
OTHER ASSETS	1,436		1,408
TOTAL ASSETS	$	1,433,872	$	1,073,793

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	34,079	$	22,891
Accrued expenses	20,676		14,936
Accrued compensation and benefits	40,909		22,228
Earnout liability	—		30,812
Operating lease liabilities—current	5,289		—
Other current liabilities	7,864		4,944
Total current liabilities	108,817		95,811
DEBT	459,043		311,814
DEFERRED INCOME TAXES	140,988		105,844
OPERATING LEASE LIABILITIES	38,392		—
OTHER LIABILITIES	11,743		14,635
Total liabilities	758,983		528,104

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:
Common stock, $.01 par value	1,635		1,622
Additional paid-in capital	544,771		548,113
Retained earnings (accumulated deficit)	128,254		(2,792)
Accumulated other comprehensive income (loss)	229		(1,254)
Total shareholders’ equity	674,889		545,689
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,433,872	$	1,073,793

SELECTQUOTE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands)
	Three Months Ended June 30,				Year Ended June 30,
	2021		2020		2021		2020
REVENUE:
Commission	$	162,294	$	122,679	$	826,606	$	476,606
Production bonus and other	26,155		18,768		111,209		54,909
Total revenue	188,449		141,447		937,815		531,515

OPERATING COSTS AND EXPENSES:
Cost of revenue	64,110		40,911		270,715		167,399
Marketing and advertising	86,595		51,911		385,291		184,157
General and administrative	18,618		9,504		63,114		35,283
Technical development	5,165		3,259		18,623		12,347
Total operating costs and expenses	174,488		105,585		737,743		399,186

INCOME FROM OPERATIONS	13,961		35,862		200,072		132,329

INTEREST EXPENSE, NET	(8,422)		(8,356)		(29,320)		(24,595)
LOSS ON EXTINGUISHMENT OF DEBT	—		(1,166)		(3,315)		(1,166)
OTHER EXPENSES, NET	(43)		(385)		(1,588)		(405)
INCOME BEFORE INCOME TAX EXPENSE	5,496		25,955		165,849		106,163
INCOME TAX EXPENSE	2,184		5,906		34,803		25,016

NET INCOME	$	3,312	$	20,049	$	131,046	$	81,147

NET INCOME (LOSS) PER SHARE:
Basic	$	0.02	$	0.15	$	0.80	$	(0.16)
Diluted	$	0.02	$	0.13	$	0.79	$	(0.16)

WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:
Basic	163,441		120,018		162,889		97,496
Diluted	165,689		152,404		165,544		97,496

OTHER COMPREHENSIVE (LOSS) INCOME NET OF TAX:
(Loss) gain on cash flow hedge	(186)		(1,254)		1,483		(1,254)
OTHER COMPREHENSIVE (LOSS) INCOME	(186)		(1,254)		1,483		(1,254)
COMPREHENSIVE INCOME	$	3,126	$	18,795	$	132,529	$	79,893

SELECTQUOTE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
	Three Months Ended June 30,				Year Ended June 30,
	2021		2020		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,312	$	20,049	$	131,046	$	81,147
Adjustments to reconcile net income to net cash, cash equivalents, and restricted cash used in operating activities:
Depreciation and amortization	4,883		2,720		16,142		7,993
Loss on disposal of property, equipment, and software	425		125		686		360
Share-based compensation expense	1,476		216		5,165		9,498
Deferred income taxes	2,180		5,889		34,654		25,007
Amortization of debt issuance costs and debt discount	862		835		3,344		2,266
Write-off of debt issuance costs	—		237		2,570		237
Fair value adjustments to contingent earnout obligations	—		375		1,488		375
Non-cash lease expense	953		—		3,823		—
Changes in operating assets and liabilities:
Accounts receivable	25,077		1,472		(27,827)		(15,585)
Commissions receivable	(81,747)		(54,910)		(332,936)		(197,364)
Other assets	500		(4,772)		4,848		(3,352)
Accounts payable and accrued expenses	(6,495)		2,776		19,728		15,672
Operating lease liabilities	(1,151)		—		(3,782)		—
Other liabilities	(4,768)		5,243		25,609		11,970
Net cash used in operating activities	(54,493)		(19,745)		(115,442)		(61,776)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(8,387)		(3,260)		(14,907)		(9,446)
Proceeds from sales of property and equipment	—		—		—		3
Purchases of software and capitalized software development costs	(2,275)		(1,663)		(8,081)		(6,106)
Acquisition of business	(17,150)		(35,821)		(41,028)		(35,821)
Net cash used in investing activities	(27,812)		(40,744)		(64,016)		(51,370)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit	—		2,014		—		87,989
Payments on revolving line of credit	—		(2,014)		—		(99,021)
Net proceeds from Term Loans	—		—		228,753		416,500
Payments on Term Loans	—		(100,000)		(84,118)		(100,000)
Proceeds from other debt	—		4,450		—		16,575
Payments on other debt	(62)		(29,015)		(251)		(31,447)
Proceeds from common stock options exercised and employee stock purchase plan	109		141		1,887		5,506
Cash dividends paid	—		—		—		(275,000)
Issuance of preferred stock	—		135,000		—		135,000
Payments of tax withholdings related to net share settlement of equity awards	(336)		—		(10,362)		—
Payments of debt issuance costs	—		(160)		(885)		(7,854)
Payments of costs incurred in connection with private placement	—		(3,784)		(1,771)		(3,784)
Payments of costs incurred in connection with initial public offering	—		(1,100)		(3,911)		(3,218)
Proceeds from initial public offering, net of underwriters’ discounts and commissions	—		340,200		—		340,200
Payment of contingent earnout liability	—		—		(32,300)		—
Net cash (used in) provided by financing activities	(289)		345,732		97,042		481,446
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(82,594)		285,243		(82,416)		368,300
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of year	369,048		83,627		368,870		570
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of year	$	286,454	$	368,870	$	286,454	$	368,870

SELECTQUOTE, INC. AND SUBSIDIARIES Adjusted EBITDA to Net Income Reconciliation (Unaudited)
	4Q 2021
(in thousands)	Senior		Life		Auto & Home		Corp & Elims		Consolidated
Revenue	$	124,391	$	59,905	$	7,161	$	(3,008)	$	188,449
Operating expenses	(99,561)		(49,595)		(5,845)		(12,128)		(167,129)
Other expenses, net	—		—		—		(43)		(43)
Adjusted EBITDA	24,830		10,310		1,316		(15,179)		21,277
Share-based compensation expense									(1,476)
Non-recurring expenses									(575)
Depreciation and amortization									(4,883)
Loss on disposal of property, equipment, and software									(425)
Interest expense, net									(8,422)
Income tax expense									(2,184)
Net income									$	3,312

	4Q 2020
(in thousands)	Senior		Life		Auto & Home		Corp & Elims		Consolidated
Revenue	$	87,865	$	42,423	$	12,127	$	(968)	$	141,447
Operating expenses	(54,478)		(30,165)		(9,023)		(7,633)		(101,299)
Other expenses, net	—		—		—		(10)		(10)
Adjusted EBITDA	33,387		12,258		3,104		(8,611)		40,138
Share-based compensation expense									(216)
Non-recurring expenses									(1,053)
Depreciation and amortization									(2,720)
Loss on disposal of property, equipment, and software									(125)
Contingent consideration									(375)
Restructuring expenses									(172)
Interest expense, net									(8,356)
Loss on extinguishment of debt									(1,166)
Income tax expense									(5,906)
Net income									$	20,049

SELECTQUOTE, INC. AND SUBSIDIARIES Adjusted EBITDA to Net Income Reconciliation (Unaudited)
	FY 2021
(in thousands)	Senior		Life		Auto & Home		Corp & Elims		Consolidated
Revenue	$	728,701	$	185,503	$	30,913	$	(7,302)	$	937,815
Operating expenses	(484,924)		(155,127)		(22,735)		(46,899)		(709,685)
Other expenses, net	—		—		—		(100)		(100)
Adjusted EBITDA	243,777		30,376		8,178		(54,301)		228,030
Share-based compensation expense									(5,165)
Non-recurring expenses									(6,065)
Fair value adjustments to contingent earnout obligations									(1,488)
Depreciation and amortization									(16,142)
Loss on disposal of property, equipment, and software									(686)
Interest expense, net									(29,320)
Loss on extinguishment of debt									(3,315)
Income tax expense									(34,803)
Net income									$	131,046

	FY 2020
(in thousands)	Senior		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	$	361,673	$	129,967	$	41,189	$	(1,314)		$	531,515
Operating expenses	(215,935)		(102,155)		(32,490)		(26,881)		(1)	(377,461)
Other expenses, net	—		—		—		(30)			(30)
Adjusted EBITDA	$	145,738	$	27,812	$	8,699	$	(28,225)		154,024
Share-based compensation expense										(9,498)
Non-recurring expenses										(3,721)
Depreciation and amortization										(7,993)
Loss on disposal of property, equipment, and software										(360)
Fair value adjustments to contingent earnout obligations										(375)
Restructuring expenses										(153)
Interest expense, net										(24,595)
Loss on extinguishment of debt										(1,166)
Income tax expense										(25,016)
Net income										$	81,147

View source version on businesswire.com: https://www.businesswire.com/news/home/20210825005743/en/

Investor Relations:

Sloan Bohlen

877-678-4083

[email protected]

Media:

Matt Gunter

913-286-4931

[email protected]

Kelly Hale

913-653-4375

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KEYWORDS: United States North America Kansas

INDUSTRY KEYWORDS: Professional Services Insurance Finance

MEDIA:

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August 25, 2021 4:18 pm

ABM Industries Announces Definitive Agreement to Acquire Able Services

—Strategic Acquisition Adds $1.1 Billion in Engineering and Janitorial Services Revenues—

—Increases ABM’s Engineering and Technical Services Revenues to ≈ $2 Billion, Expanding Sustainability & Energy-Efficiency Offerings—

—Strengthens Janitorial Services Business and Provides Opportunities to Expand EnhancedClean™ Across Broader Footprint—

—Operating Synergies of Approximately $30 Million to $40 Million Identified—

—Transaction Expected to be Accretive to Adjusted Earnings Per Share Immediately After Closing—

—Conference call to be held today at 6:15 PM ET—

NEW YORK, Aug. 25, 2021 (GLOBE NEWSWIRE) — ABM (NYSE: ABM), a leading provider of facility solutions, announced today that it has reached a definitive agreement to acquire Able Services, a leading facilities services company headquartered in San Francisco, in a cash transaction valued at $830 million. The transaction is expected to close by the end of September, subject to approval under the Hart-Scott-Rodino Antitrust Act and other closing conditions.

Founded in 1926, Able is the largest family-owned provider of building maintenance, engineering and facility operations in the United States, with revenues of $1.1 billion and adjusted EBITDA of $65 million, normalized for COVID-19-related impacts. Engineering services represents approximately 60% of their total revenues, with janitorial services accounting for approximately 40%. Able’s 80% unionized workforce provides facility services to over one billion square feet of real estate, strengthening ABM’s national presence. ABM expects the transaction to be accretive to adjusted earnings per share immediately after closing.

The acquisition will also bolster ABM’s engineering and technical services, which are expected to generate almost $2 billion of combined annualized revenue and expand ABM’s sustainability and energy efficiency offerings amid growing demand for environmentally responsible solutions.

Scott Salmirs, President and Chief Executive Officer of ABM, noted, “This acquisition is fully aligned with the strategic plan we have developed to accelerate our revenue growth and margin expansion in the coming years. Able represents an excellent strategic and cultural fit for us, adding to our scale in engineering and janitorial services, which represent priority growth areas for ABM over the next five years. Additionally, Able’s commitment to delivering outstanding service to its clients while engaging with its team members fits well with ABM’s culture and values. Together, we will build upon our respective strengths and shared values as we provide a broader array of services to an expanded client roster.”

Salmirs continued, “Able’s strong engineering capabilities will assist us in achieving our strategic growth objectives as we build upon our offerings to include integrated facilities services and multi-service bundles to our core clients. At the same time, Able’s substantial janitorial services business in key geographies and long-standing relationships with large corporate clients are perfectly aligned with our broader portfolio. We will gain over $400 million in janitorial services revenue at a time when safety and health are of primary importance to commercial clients. Through our EnhancedClean™ offering, ABM has become a leader in virus protection services, and we believe that our combined janitorial business will be well-positioned to meet continued demand for these services in a post-pandemic environment. We greatly admire Able’s heritage, excellent reputation, and highly talented team members. Importantly, we both are mission driven organizations, and our collective purpose has never meant more, while the value and demand for what we do continues to increase.”

Paul Saccone, Chief Executive Officer of Able, said, “This combination provides us with an excellent opportunity to continue to grow our business, supported by the resources of ABM. We both have long histories of serving clients and building a collegial culture that prioritizes being a trusted provider to some of the largest companies in the world, delivering customized services and creating leadership paths for our employees. We look forward to working together to continue to provide clients with high quality services and support.”

ABM expects to achieve approximately $30 million to $40 million in cost synergies, the majority of which are expected be realized within the first year following completion of the transaction.

Advisors

Goldman Sachs & Co. LLC is serving as exclusive financial advisor to ABM. Jones Day is its legal advisor. Stifel and Morrison & Foerster are serving as Able’s financial and legal advisors, respectively.

Conference Call Information

ABM will host a conference call today at 6:15 PM Eastern time to discuss this transaction. The live conference call can be accessed via audio webcast at the “Investors” section of the Company’s website, located at www.abm.com, or by dialing (877) 407-4018 approximately 15 minutes prior to the scheduled time. A supplemental presentation will accompany the webcast on the Company’s website.

A replay will be available approximately two hours after the recording through September 8, 2021 and can be accessed by dialing (844) 512-2921 and then entering ID #13722637. An archive will also be available on the ABM website for 90 days.

ABOUT ABM

ABM (NYSE: ABM) is a leading provider of facility solutions with revenues of approximately $6.0 billion and more than 100,000 employees in 350+ offices throughout the United States and various international locations. ABM’s comprehensive capabilities include janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, mission critical solutions and parking, provided through stand-alone or integrated solutions. ABM provides custom facility solutions in urban, suburban and rural areas to properties of all sizes – from schools and commercial buildings to hospitals, data centers, manufacturing plants and airports. ABM Industries Incorporated, which operates through its subsidiaries, was founded in 1909. For more information, visit www.abm.com.

Cautionary Statement under the Private Securities Litigation Reform Act of 1995

This press release contains both historical and forward-looking statements addressing the plan of ABM Industries Incorporated (together with its subsidiaries, collectively referred to as “ABM,” “we,” “us” or “our”) to acquire Able Services (together with its subsidiaries, collectively referred to as “Able”). In this context, we make forward-looking statements related to future expectations, estimates and projections that are uncertain, and often contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “should,” “target” or other similar words or phrases. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict.

For us, particular uncertainties that could cause our actual results to be materially different from those expressed in our forward-looking statements include: our ability to successfully complete the proposed acquisition of Able, including satisfying closing conditions; any delay in closing the proposed acquisition of Able; the occurrence of any event that could give rise to termination of the purchase agreement governing the acquisition of Able; risks inherent in the achievement of cost synergies and the timing thereof; risks related to the disruption to ABM and Able and their respective management as a result of the proposed acquisition; the effect of the announcement of the proposed acquisition on Able’s ability to retain and hire key personnel and maintain relationships with clients, suppliers and other third parties; our ability to successfully integrate Able if the proposed acquisition is completed, including whether and to what extent the proposed acquisition will be accretive within the expected timeframe; the impact of the COVID-19 pandemic, which has (i) had and is expected to continue to have a negative effect on the global economy and the United States economy, (ii) disrupted and is expected to continue to disrupt our operations and our clients’ operations, and (iii) adversely affected and may continue to adversely affect our business, results of operations, cash flows and financial condition; our ability to gain profitable business despite competitive market pressures; our ability to attract and retain qualified personnel and senior management and to manage labor costs; our ability to preserve long-term client relationships; changes to our businesses, operating structure, financial reporting structure or personnel relating to the implementation of strategic transformations, enhanced business processes and technology initiatives may not have the desired effects on our financial condition and results of operations; our use of subcontractors or joint venture partners to perform work under customer contracts exposes us to liability and financial risk; we manage our insurable risks through a combination of third-party purchased policies and self-insurance, and we retain a substantial portion of the risk associated with expected losses under these programs, which exposes us to volatility associated with those risks, including the possibility that changes in estimates to our ultimate insurance loss reserves could result in material charges against our earnings; changes in general economic conditions, such as changes in energy prices, government regulations or consumer preferences, could reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition; future increases in the level of our borrowings or in interest rates could affect our results of operations; our business may be negatively impacted by adverse weather conditions and catastrophic events, disasters and terrorist attacks could disrupt our services.

For additional information on these and other risks and uncertainties we face, see ABM’s risk factors, as they may be amended from time to time, set forth in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and subsequent filings. We urge readers to consider these risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of Non-GAAP Financial Information

The Company has presented, in this press release, an estimate for Able’s adjusted EBITDA contribution. Adjusted EBITDA is a non-GAAP financial measure which represents earnings before interest, taxes, depreciation, amortization and other adjustments. Able uses adjusted EBITDA as a measurement of financial results and as an indication of the relative strength of operating performance. The Company’s estimate of Able’s adjusted EBITDA is based only on projected financial information available as of the date hereof. This non-GAAP financial measure is not intended to replace the presentation of financial results in accordance with U.S. GAAP. This non-GAAP financial measure may not be comparable to similar measures used by other companies and may exclude certain nondiscretionary expenses and reflect other adjustments. Reconciliations of this forward-looking non-GAAP financial measure to the most directly comparable GAAP financial measure is not provided because the Company is unable to provide such reconciliation without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of information concerning amounts of certain items excluded from adjusted EBITDA, such as amortization and taxes and items impacting comparability, which are not determinable on a forward-looking basis at this time.

Contact:

Investor Relations:
David Gold
(212) 750-5800
[email protected]

Media:
Nadeen Ayala
[email protected]

August 25, 2021 4:18 pm

ResMed Announces SaaS Leadership Change

Change intended to drive rapid digital transformation, leverage full scale of cloud-connected technology platforms, and accelerate growth of ResMed’s SaaS business

SAN DIEGO, Aug. 25, 2021 (GLOBE NEWSWIRE) — ResMed (NYSE: RMD, ASX: RMD), today announced the promotion of Bobby Ghoshal to President of ResMed’s SaaS business, effective immediately. Raj Sodhi will be leaving full-time employment at ResMed, effective September 1.

Bobby has over 25 years of experience across medical and technology industries, most currently serving as ResMed’s Chief Technology Officer (CTO), with strong experience building and leading high-performing teams to accelerate the adoption of digital platforms across enterprises. From February 2016 until April 2018, Bobby served as chief operating officer for Brightree, a ResMed-owned provider of cloud-based software-as-a-service for out-of-hospital care. ResMed will commence a search process for a new CTO immediately; Bobby will remain in the CTO role until a replacement is found.

“As we look ahead to 2025, we believe the future of healthcare is outside the hospital and we have an amazing mission to improve over 250 million lives,” said Mick Farrell, ResMed’s CEO. “We must accelerate our efforts to bring software technology, along with digital and commercial innovation, to these care settings. Digital solutions, scalable digital platforms, and software embedded into our customers’ workflows are critical to our growth strategy – Bobby’s experience as ResMed’s CTO, his hands-on experience with Brightree, and his strong background across many industries makes him the right leader to accelerate our SaaS business to meet our goals for 2025 and beyond.”

“I’d like to thank Raj for the incredible work he’s done over the past nine years at ResMed,” continued Farrell. “Raj played an important role in developing the healthcare informatics function at ResMed, a function that helped to transform the company on our path to becoming the leader in digital health. He also helped to craft the SaaS strategy and lead multiple acquisitions that established the foundation for us to scale and grow our SaaS business in home medical equipment, skilled nursing facilities, home health, hospice, private duty homecare, and beyond.”

About ResMed

At ResMed (NYSE: RMD, ASX: RMD) we pioneer innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. Our digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, COPD, and other chronic diseases. Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. By enabling better care, we improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems in more than 140 countries. To learn more, visit ResMed.com and follow @ResMed.

For investors	For media
Amy Wakeham	Jayme Rubenstein
+1 858.836.5000	+1 858.836.6798
[email protected]	[email protected]

August 25, 2021 4:18 pm

Williams-Sonoma, Inc. announces record second quarter results

Williams-Sonoma, Inc. announces record second quarter results

Q2 revenues grow 30.7% with comparable brand revenue growth of 29.8%, 2YR comp of 40.3%

Q2 GAAP operating margin of 16.6%; Q2 Non-GAAP operating margin expansion of 360bps to 16.7%

Q2 GAAP diluted EPS of $3.21; Q2 Non-GAAP diluted EPS of $3.24, increasing 80%

Quarterly dividend increase of 20%; new stock repurchase authorization of $1.25 billion

Raises full-year 2021 and long-term outlook

SAN FRANCISCO–(BUSINESS WIRE)–
Williams-Sonoma, Inc. (NYSE: WSM), the world’s largest digital-first, design-led and sustainable home retailer, today announced operating results for the second fiscal quarter ended August 1, 2021 (“Q2 21”) versus the second fiscal quarter ended August 2, 2020 (“Q2 20”).

“We are proud to report another quarter of outperformance with a 30% comp, strong growth across all brands and channels, and 360 basis points of operating margin expansion. These second quarter results demonstrate the success of our growth strategies and the earnings power of our company. We have an advantage in the industry due to our exclusive in-house design capability, our channel strategy which is digital-first but not digital only, and our values – with sustainability and equity underlying all that we do,” said Laura Alber, President and Chief Executive Officer.

“The momentum we are seeing in our business and our winning positioning set us up to continue to take share in a fractured market. We do not see any evidence that growth trends are waning, and in fact, we see favorability in the macro environment as more people prioritize their homes and home décor. We believe we are at the intersection of a transformative change that will accelerate the growth of our industry, and our market share within the industry. In addition, our growth strategies are gaining traction faster than we predicted, and our key differentiators are further distancing us from our competition.” Alber continued.

Alber concluded, “We see a clear path to beating our previous revenue and profitability targets and we are raising our full year revenue outlook again, with revenue growth now expected to be in the high teens to low twenties and operating margins now expected to be in the range of 16% to 17%. Given our increased optimism, we now expect to achieve our long-term goal of $10 billion in revenues in 2024, one year faster than previously expected, and with higher profitability, which will now be at or above our increased FY21 operating margin.”

SECOND QUARTER 2021

Revenues grow 30.7%, with strong growth across all brands and channels, including ecommerce holding at 65% of total company revenues
Comparable brand revenue growth of 29.8%, including West Elm at 51.1%, Pottery Barn at 29.6%, Pottery Barn Kids and Teen at 18.0%, and Williams Sonoma at 6.4% on top of a 29.4% last year
Ecommerce and retail comparable brand revenue growth on a two-year basis were 58.0% and 56.5%, respectively
GAAP and non-GAAP gross margin of 44.1%, expanding 710bps and driven by higher year-over-year merchandise margins as well as occupancy leverage of approximately 210bps; occupancy costs were $176 million
GAAP operating margin of 16.6%; non-GAAP operating margin of 16.7%, leveraging approximately 360bps
GAAP diluted EPS of $3.21; non-GAAP diluted EPS of $3.24, increasing 80% over last year
Maintaining strong liquidity position of $655 million in cash and over $475 million in operating cash flow, enabling the company to repurchase an additional $135 million in shares in the second quarter and over $450 million year-to-date. We also announced in a separate release today, an additional 20% quarterly dividend increase to $0.71, and a new stock repurchase authorization raising our existing authorization from the approximate $500 million remaining to $1.25 billion.

OUTLOOK

Fiscal Year 2021

Given the strength of our business year-to-date and the macro trends that we believe will continue to benefit our business, we are raising our fiscal year 2021 outlook to high-teens to low-twenties net revenue growth and non-GAAP operating margin between 16% to 17%.

Long-Term

For the long-term, we are planning for net revenue growth of mid-to-high single digits with an accelerated path to $10 billion in net revenues now over the next four years. Our continued strong results, combined with our three key differentiators of in-house design, digital-first channel strategy and values, and the macro trends that should benefit our business over the long-term, give us confidence in these future growth projections and an accelerated path to $10 billion in net revenues by 2024 while maintaining at least fiscal year end 2021 non-GAAP operating margins. This reflects reaching our long-term revenue outlook one year faster, and with higher profitability.

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, August 25, 2021, at 2:00 P.M. (PT). The call, hosted by Laura Alber, President and Chief Executive Officer, will be open to the general public via live webcast and can be accessed at http://ir.williams-sonomainc.com/events. A replay of the webcast will be available at http://ir.williams-sonomainc.com/events.

SEC REGULATION G — NON-GAAP INFORMATION

This press release includes non-GAAP financial measures. Exhibit 1 provides reconciliations of these non-GAAP financial measures to the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We have not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential variability and limited visibility of excluded items; these excluded items may include expenses related to the impact of inventory write-offs, the acquisition of Outward, Inc., and asset impairment charges. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of current period performance on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. In addition, certain other items may be excluded from non-GAAP financial measures when the company believes this provides greater clarity to management and investors. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to the GAAP financial measures presented in this press release and our financial statements and other publicly filed reports. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements relating to: our ability to capture significant opportunities in the home furnishings industry; increase our market share; macro trends; our ability to continue to improve performance; our focus on operational excellence; our ability to improve customers’ experience; our growth strategies; our optimism about the future; our ability to maximize growth and maintain high profitability; our fiscal year 2021 outlook and long-term financial targets, including projected net revenue growth and operating margin expansion; our stock repurchase program and dividend expectations; our planned capital investments; and our proposed store openings and closures.

The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: continuing changes in general economic conditions, and the impact on consumer confidence and consumer spending; the continuing impact of the coronavirus on our global supply chain, retail store operations and customer demand; new interpretations of or changes to current accounting rules; our ability to anticipate consumer preferences and buying trends; dependence on timely introduction and customer acceptance of our merchandise; changes in consumer spending based on weather, political, competitive and other conditions beyond our control; delays in store openings; competition from companies with concepts or products similar to ours; timely and effective sourcing of merchandise from our foreign and domestic vendors and delivery of merchandise through our supply chain to our stores and customers; effective inventory management; our ability to manage customer returns; successful catalog management, including timing, sizing and merchandising; uncertainties in e-marketing, infrastructure and regulation; multi-channel and multi-brand complexities; our ability to introduce new brands and brand extensions; challenges associated with our increasing global presence; dependence on external funding sources for operating capital; disruptions in the financial markets; our ability to control employment, occupancy and other operating costs; our ability to improve our systems and processes; changes to our information technology infrastructure; general political, economic and market conditions and events, including war, conflict or acts of terrorism; the impact of current and potential future tariffs and our ability to mitigate impacts; the impact of inflation on consumer spending; the potential for increased corporate income taxes; and other risks and uncertainties described more fully in our public announcements, reports to stockholders and other documents filed with or furnished to the SEC, including our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. We have not filed our Form 10-Q for the quarter ended August 1, 2021. As a result, all financial results described here should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time we file the Form 10-Q. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

ABOUT WILLIAMS-SONOMA, INC.

Williams-Sonoma, Inc. is the world’s largest digital-first, design-led and sustainable home retailer. The company’s products, representing distinct merchandise strategies — Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, and Mark and Graham — are marketed through e-commerce websites, direct-mail catalogs and retail stores. These brands are also part of The Key Rewards, our free-to-join loyalty program that offers members exclusive benefits across the Williams-Sonoma family of brands. We operate in the U.S., Puerto Rico, Canada, Australia and the United Kingdom, offer international shipping to customers worldwide, and have unaffiliated franchisees that operate stores in the Middle East, the Philippines, Mexico, South Korea and India, as well as e-commerce websites in certain locations. We are also proud to lead the industry with our Environmental, Social and Governance (“ESG”) efforts. Our company is Good By Design — we’ve deeply engrained sustainability into our business. From our factories to your home, we’re united in a shared purpose to care for our people and our planet.

For more information on our ESG efforts, please visit: https://sustainability.williams-sonomainc.com/

WSM-IR

Condensed Consolidated Statements of Earnings (unaudited)

	Thirteen Weeks Ended									Twenty-six Weeks Ended
	August 1, 2021					August 2, 2020				August 1, 2021				August 2, 2020
				% of				% of				% of				% of
In thousands, except per share amounts	$			Revenues		$		Revenues		$		Revenues		$		Revenues
Net revenues	$	1,948,339		100	%	$	1,490,777	100	%	$	3,697,368	100	%	$	2,725,980	100	%
Cost of goods sold	1,089,951			55.9		939,575		63.0		2,086,127		56.4		1,760,518		64.6
Gross profit	858,388			44.1		551,202		37.0		1,611,241		43.6		965,462		35.4
Selling, general and administrative expenses	535,288			27.5		365,841		24.5		1,012,964		27.4		731,456		26.8
Operating income	323,100			16.6		185,361		12.4		598,277		16.2		234,006		8.6
Interest (income) expense, net	(39		)	—		6,464		0.4		1,833		—		8,623		0.3
Earnings before income taxes	323,139			16.6		178,897		12.0		596,444		16.1		225,383		8.3
Income taxes	77,069			4.0		44,333		3.0		122,572		3.3		55,396		2.0
Net earnings	$	246,070		12.6	%	$	134,564	9.0	%	$	473,872	12.8	%	$	169,987	6.2	%
Earnings per share (EPS):
Basic	$	3.29				$	1.73			$	6.29			$	2.19
Diluted	$	3.21				$	1.70			$	6.11			$	2.16
Shares used in calculation of EPS:
Basic	74,786					77,783				75,293				77,522
Diluted	76,584					79,264				77,516				78,841

2nd Quarter Net Revenues and Comparable Brand Revenue Growth by Concept*

	Net Revenues				Comparable Brand Revenue
	(Millions)				Growth
	Q2 21		Q2 20		Q2 21		Q2 20
Pottery Barn	$	732	$	563	29.6	%	8.1	%
West Elm	580		381		51.1		7.0
Williams Sonoma	255		243		6.4		29.4
Pottery Barn Kids and Teen	274		236		18.0		4.8
Other**	107		68		N/A		N/A
Total	$	1,948	$	1,491	29.8	%	10.5	%

* See the Company’s 10-K and 10-Q filings for the definition of comparable brand revenue, which is calculated on a 13-week to 13-week basis for Q2 2021 and Q2 2020. Comparable stores that were temporarily closed due to COVID-19 were not excluded from the comparable stores calculation. ** Primarily consists of net revenues from our international franchise operations, Rejuvenation and Mark and Graham.

Condensed Consolidated Balance Sheets (unaudited)

In thousands, except per share amounts	August 1, 2021			January 31, 2021			August 2, 2020
Assets
Current assets
Cash and cash equivalents	$	655,211		$	1,200,337		$	947,760
Accounts receivable, net	141,814			143,728			128,737
Merchandise inventories, net	1,170,561			1,006,299			1,042,340
Prepaid expenses	85,587			93,822			109,495
Other current assets	20,537			22,894			27,098
Total current assets	2,073,710			2,467,080			2,255,430
Property and equipment, net	875,295			873,894			887,401
Operating lease right-of-use assets	1,052,617			1,086,009			1,146,229
Deferred income taxes, net	58,848			61,854			37,789
Goodwill	85,421			85,446			85,419
Other long-term assets, net	99,146			87,141			75,028
Total assets	$	4,245,037		$	4,661,424		$	4,487,296
Liabilities and Stockholders’ equity
Current liabilities
Accounts payable	$	601,879		$	542,992		$	373,086
Accrued expenses	224,089			267,592			158,407
Gift card and other deferred revenue	403,409			373,164			292,684
Income taxes payable	61,335			69,476			28,502
Current debt	—			299,350			—
Borrowings under revolving line of credit	—			—			487,823
Operating lease liabilities	213,784			209,754			221,575
Other current liabilities	74,331			85,672			102,086
Total current liabilities	1,578,827			1,848,000			1,664,163
Deferred lease incentives	18,359			20,612			24,684
Long-term debt	—			—			298,995
Long-term operating lease liabilities	994,165			1,025,057			1,080,622
Other long-term liabilities	126,967			116,570			85,910
Total liabilities	2,718,318			3,010,239			3,154,374
Stockholders’ equity
Preferred stock: $0.01 par value; 7,500 shares authorized, none issued	—			—			—
Common stock: $0.01 par value; 253,125 shares authorized; 74,426, 76,340, and 77,796 shares issued and outstanding at August 1, 2021, January 31, 2021 and August 2, 2020, respectively	745			764			778
Additional paid-in capital	569,734			638,375			608,892
Retained earnings	964,000			1,019,762			736,772
Accumulated other comprehensive loss	(7,049		)	(7,117		)	(12,921		)
Treasury stock, at cost	(711		)	(599		)	(599		)
Total stockholders’ equity	1,526,719			1,651,185			1,332,922
Total liabilities and stockholders’ equity	$	4,245,037		$	4,661,424		$	4,487,296

Retail Store Data
(unaudited)

	May 2, 2021	Openings	Closings		August 1, 2021	August 2, 2020
Williams Sonoma	195	3	(2	)	196	210
Pottery Barn	195	1	(1	)	195	201
West Elm	121	2	—		123	121
Pottery Barn Kids	57	—	—		57	72
Rejuvenation	10	—	—		10	10
Total	578	6	(3	)	581	614

Condensed Consolidated Statements of Cash Flows (unaudited)

	Twenty-six Weeks Ended
In thousands	August 1, 2021			August 2, 2020
Cash flows from operating activities:
Net earnings	$	473,872		$	169,987
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	96,687			93,120
Loss on disposal/impairment of assets	455			25,408
Amortization of deferred lease incentives	(2,254		)	(2,975		)
Non-cash lease expense	105,739			108,448
Deferred income taxes	(7,037		)	(2,229		)
Tax benefit related to stock-based awards	10,302			12,694
Stock-based compensation expense	46,260			33,395
Other	(274		)	255
Changes in:
Accounts receivable	2,002			(16,740		)
Merchandise inventories	(163,621		)	60,055
Prepaid expenses and other assets	(4,622		)	(30,968		)
Accounts payable	48,457			(141,602		)
Accrued expenses and other liabilities	(43,653		)	12,117
Gift card and other deferred revenue	30,308			2,936
Operating lease liabilities	(108,791		)	(113,489		)
Income taxes payable	(8,162		)	5,988
Net cash provided by operating activities	475,668			216,400
Cash flows from investing activities:
Purchases of property and equipment	(78,281		)	(76,123		)
Other	97			241
Net cash used in investing activities	(78,184		)	(75,882		)
Cash flows from financing activities:
Repurchases of common stock	(451,388		)	—
Repayment of long-term debt	(300,000		)	—
Tax withholdings related to stock-based awards	(100,160		)	(29,589		)
Payment of dividends	(91,069		)	(79,274		)
Borrowings under revolving line of credit	—			487,823
Debt issuance costs	—			(1,050		)
Net cash (used in) provided by financing activities	(942,617		)	377,910
Effect of exchange rates on cash and cash equivalents	7			(2,830		)
Net (decrease) increase in cash and cash equivalents	(545,126		)	515,598
Cash and cash equivalents at beginning of period	1,200,337			432,162
Cash and cash equivalents at end of period	$	655,211		$	947,760

Exhibit 1
2nd Quarter GAAP to Non-GAAP Reconciliation
(unaudited)

(Dollars in thousands, except per share data)

	Thirteen Weeks Ended										Twenty-six Weeks Ended
	August 1, 2021					August 2, 2020					August 1, 2021					August 2, 2020
	$			% of		$			% of		$			% of		$			% of
	$			revenues		$			revenues		$			revenues		$			revenues
Gross profit	$	858,388		44.1	%	$	551,202		37.0	%	$	1,611,241		43.6	%	$	965,462		35.4	%
Inventory write-off ¹	—					—					—					11,378
Non-GAAP gross profit	$	858,388		44.1	%	$	551,202		37.0	%	$	1,611,241		43.6	%	$	976,840		35.8	%


Selling, general and administrative expenses	$	535,288		27.5	%	$	365,841		24.5	%	$	1,012,964		27.4	%	$	731,456		26.8	%
Outward-related ²	(2,757		)			(3,341		)			(5,596		)			(6,699		)
Asset impairment³	—					(6,355		)			—					(21,975		)
Non-GAAP selling, general and administrative expenses	$	532,531		27.3	%	$	356,145		23.9	%	$	1,007,368		27.2	%	$	702,782		25.8	%


Operating income	$	323,100		16.6	%	$	185,361		12.4	%	$	598,277		16.2	%	$	234,006		8.6	%
Outward-related ²	2,757					3,341					5,596					6,699
Inventory write-off¹	—					—					—					11,378
Asset impairment³	—					6,355					—					21,975
Non-GAAP operating income	$	325,857		16.7	%	$	195,057		13.1	%	$	603,873		16.3	%	$	274,058		10.1	%

	$			Tax rate		$			Tax rate		$			Tax rate		$			Tax rate
Income taxes	$	77,069		23.9	%	$	44,333		24.8	%	$	122,572		20.6	%	$	55,396		24.6	%
Outward-related ²	462					451					973					1,192
Inventory write-off ¹	—					—					—					2,940
Asset impairment ³	—					1,287					—					5,324
Non-GAAP income taxes	$	77,531		23.8	%	$	46,071		24.4	%	$	123,545		20.5	%	$	64,852		24.4	%


Diluted EPS	$	3.21				$	1.70				$	6.11				$	2.16
Outward-related ²	0.03					0.04					0.06					0.07
Inventory write-off ¹	—					—					—					0.11
Asset impairment ³	—					0.06					—					0.21
Non-GAAP diluted EPS*	$	3.24				$	1.80				$	6.17				$	2.54
∗ Per share amounts may not sum due to rounding to the nearest cent per diluted share

SEC Regulation G – Non-GAAP Information

These tables include non-GAAP gross profit, gross margin, selling, general and administrative expense, operating income, operating margin, income taxes, effective tax rate and diluted EPS. We believe that these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of our quarterly actual results on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Notes to Exhibit 1:

During year-to-date 2020, we incurred approximately $11.4 million of inventory write-offs for inventory with minor damage that we could not liquidate through our outlets due to store closures resulting from COVID-19.
During Q2 2021 and year-to-date 2021, we incurred approximately $2.8 million and $5.6 million, respectively, associated with acquisition-related compensation expense and the amortization of acquired intangibles for Outward, Inc. During Q2 2020 and year-to-date 2020, we incurred approximately $3.3 million and $6.7 million, respectively, associated with acquisition-related compensation expense and the amortization of acquired intangibles for Outward, Inc.
During Q2 2020 and year-to-date 2020, we incurred approximately $6.4 million and $22.0 million, respectively, of expense associated with store asset impairments due to the impact that COVID-19 had on our retail stores.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210825005697/en/

Julie Whalen EVP, Chief Financial Officer – (415) 616 8524

-or-

Investor Relations – (415) 616 8571

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Home Goods Online Retail Luxury Retail Specialty

MEDIA:

August 25, 2021 4:18 pm

America First Multifamily Investors, L.P. Extends Maturity of $50 Million Line of Credit

OMAHA, Neb., Aug. 25, 2021 (GLOBE NEWSWIRE) — On August 23, 2021, America First Multifamily Investors, L.P. (NASDAQ: ATAX) (the “Partnership”) entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Bankers Trust Company (“Bankers Trust”) for a secured non-operating line of credit (“Non-operating LOC”) with a maximum commitment of $50 million. The Amended Credit Agreement modifies certain provisions of the Partnership’s previous Credit Agreement with Bankers Trust dated May 14, 2015, as amended, including extension of the maturity date to June 30, 2023, and provides a first priority security interest in a custody account that will contain the Partnership’s investments purchased with advances on the Non-operating LOC. The Partnership also entered into a new Revolving Note which bears interest at the Wall Street Journal Prime Rate plus a margin.

“The Amended Credit Agreement continues our strong relationship with Bankers Trust. The $50 million Non-operating LOC is a great source of funding for our investment acquisitions and provides a valuable tool for managing our liquidity,” said Kenneth C. Rogozinski, Chief Executive Officer of the Partnership.

About America First Multifamily Investors, L.P.

America First Multifamily Investors, L.P. was formed on April 2, 1998 under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds which have been issued to provide construction and/or permanent financing for affordable multifamily, student housing and commercial properties. The Partnership is pursuing a business strategy of acquiring additional mortgage revenue bonds and other investments on a leveraged basis. The Partnership expects and believes the interest earned on these mortgage revenue bonds is excludable from gross income for federal income tax purposes. The Partnership seeks to achieve its investment growth strategy by investing in additional mortgage revenue bonds and other investments as permitted by the Partnership’s Amended and Restated Limited Partnership Agreement, dated September 15, 2015, taking advantage of attractive financing structures available in the securities market, and entering into interest rate risk management instruments. America First Multifamily Investors, L.P. press releases are available at www.ataxfund.com.

Safe Harbor Statement

Certain statements in this report are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “potential,” “continue,” or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Partnership. The Partnership cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include, but are not limited to: risks involving current maturities of financing arrangements and our ability to renew or refinance such maturities, fluctuations in short-term interest rates, collateral valuations, mortgage revenue bond investment valuations and overall economic and credit market conditions; and the other risks detailed in the Partnership’s SEC filings (including but not limited to, the Partnership’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K). Readers are urged to consider these factors carefully in evaluating the forward-looking statements.

MEDIA CONTA
C
T:

Karen Marotta

Greystone

212-896-9149

[email protected]

INVESTOR CONTA
C
T:

Andy Grier

Senior Vice President

402-952-1235

August 25, 2021 4:18 pm

CVR Partners Announces Coffeyville Turnaround Deferral

SUGAR LAND, Texas, Aug. 25, 2021 (GLOBE NEWSWIRE) — CVR Partners, LP (“CVR Partners” or the “Partnership”) (NYSE: UAN) today announced that it currently intends to defer the scheduled turnaround at its Coffeyville, Kansas, nitrogen fertilizer facility from October 2021 to the third quarter of 2022. CVR Partners now expects its total forecasted turnaround spending for 2021 of approximately $8 million to $10 million of expense for the Coffeyville facility to be spent in 2022, which will be in addition to the planned 2022 turnaround for the Partnership’s East Dubuque nitrogen fertilizer facility.

“The health and safety of our employees, contractors and communities remains our critical priority,” said Mark Pytosh, President and Chief Executive Officer of CVR Partners’ general partner. “Between the recent spike in COVID-19 cases and the addition of Louisiana to Kansas’ travel quarantine list, we thought it prudent to reconsider the timing of this turnaround.

“Our proactive performance of maintenance activities during recent downtime events together with a planned short, opportunistic outage later in the year should enable us to safely defer this turnaround and complete the installation of the urea expansion project,” Pytosh said. “This turnaround deferral should also position us to capitalize on the strong margin environment we are currently seeing for both ammonia and UAN.”

CVR Partners will continue to monitor its marketing and operating conditions and make adjustments, if needed, to its turnaround and maintenance planning.

Forward-Looking Statements

This news release contains forward-looking statements. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding future: turnarounds and maintenance activities including the cost, timing, impact and risks thereof; margin environment and our ability to capitalize on same; continued safe, reliable operations; and other matters. You can generally identify forward-looking statements by our use of forward-looking terminology such as “outlook,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Investors are cautioned that various factors may affect these forward-looking statements, including (among others) the health and economic effects of the COVID-19 pandemic and any variant thereof, the rate of any economic improvements, impacts of planting season on our business, general economic and business conditions, and other risks. For additional discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other Securities and Exchange Commission (“SEC”) filings. These and other risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as of the date hereof. CVR Partners disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

About CVR Partners, LP

Headquartered in Sugar Land, Texas, CVR Partners, LP is a Delaware limited partnership focused on the production, marketing and distribution of nitrogen fertilizer products. It primarily produces urea ammonium nitrate (UAN) and ammonia, which are predominantly used by farmers to improve the yield and quality of their crops. CVR Partners’ Coffeyville, Kansas, nitrogen fertilizer manufacturing facility includes a 1,300 ton-per-day ammonia unit, a 3,000 ton-per-day UAN unit and a dual-train gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen. CVR Partners’ East Dubuque, Illinois, nitrogen fertilizer manufacturing facility includes a 1,075 ton-per-day ammonia unit and a 1,100 ton-per-day UAN unit.

For further information, please contact:

Investor Relations:
Richard Roberts
CVR Partners, LP
281-207-3205
[email protected]

Media Relations:
Brandee Stephens
CVR Partners, LP
281-207-3516
[email protected]